Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.

Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here are two high-flying stocks to hold for the long term and one with big downside risk.

One High-Flying Stock to Sell:

Exponent (EXPO)

Forward P/E Ratio: 36.3x

With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ: EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.

Why Does EXPO Fall Short?

1. Annual revenue growth of 4.5% over the last two years was below our standards for the business services sector
2. Revenue base of $518.7 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Eroding returns on capital suggest its historical profit centers are aging

Exponent is trading at $76.50 per share, or 36.3x forward P/E. Check out our free in-depth research report to learn more about why EXPO doesn’t pass our bar.

Two High-Flying Stocks to Watch:

Cadence (CDNS)

Forward P/S Ratio: 16.6x

With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ: CDNS) offers a software-as-a-service platform for semiconductor engineering and design.

Why Does CDNS Catch Our Eye?

1. Average billings growth of 24% over the last year enhances its liquidity and shows there is steady demand for its products
2. Software is difficult to replicate at scale and leads to a best-in-class gross margin of 85.9%
3. Software platform has product-market fit given the rapid recovery of its customer acquisition costs

At $322.99 per share, Cadence trades at 16.6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Insulet (PODD)

Forward P/E Ratio: 67.3x

Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.

Why Is PODD a Top Pick?

1. Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 26.6% over the past two years
2. Additional sales over the last five years increased its profitability as the 113% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin jumped by 21.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Insulet’s stock price of $298.35 implies a valuation ratio of 67.3x forward P/E. Is now a good time to buy? See for yourself 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 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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