Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. That said, here is one high-flying stock to hold for the long term and two with big downside risk.
Two High-Flying Stocks to Sell:
Kohl's (KSS)
Forward P/E Ratio: 34.2x
Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE: KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.
Why Should You Sell KSS?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Sales are projected to tank by 5.2% over the next 12 months as its demand continues evaporating
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Kohl’s stock price of $9.02 implies a valuation ratio of 34.2x forward P/E. To fully understand why you should be careful with KSS, check out our full research report (it’s free).
Verisk (VRSK)
Forward P/E Ratio: 43.4x
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Do We Think Twice About VRSK?
- Muted 1.9% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8.7% annually
At $312.62 per share, Verisk trades at 43.4x forward P/E. If you’re considering VRSK for your portfolio, see our FREE research report to learn more.
One High-Flying Stock to Watch:
MACOM (MTSI)
Forward P/E Ratio: 33.6x
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Does MTSI Stand Out?
- Annual revenue growth of 9.9% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 21.6% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 81.7% annually
MACOM is trading at $125.49 per share, or 33.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
