"You get what you pay for" often applies to expensive stocks with best-in-class business models and execution. While their quality can sometimes justify the premium, they typically experience elevated volatility during market downturns when expectations change.
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. Keeping that in mind, here are three high-flying stocks where the price is not right and some other investments you should look into instead.
Texas Instruments (TXN)
Forward P/E Ratio: 33.1x
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Why Are We Cautious About TXN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.9% annually over the last two years
- Efficiency has decreased over the last five years as its operating margin fell by 11.4 percentage points
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 29.7 percentage points
Texas Instruments is trading at $200.65 per share, or 33.1x forward P/E. Dive into our free research report to see why there are better opportunities than TXN.
Woodward (WWD)
Forward P/E Ratio: 34x
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.
Why Does WWD Worry Us?
- Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
- Earnings per share lagged its peers over the last five years as they only grew by 7.1% annually
- Free cash flow margin dropped by 11.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Woodward’s stock price of $245.18 implies a valuation ratio of 34x forward P/E. To fully understand why you should be careful with WWD, check out our full research report (it’s free).
AvidXchange (AVDX)
Forward P/E Ratio: 36x
Born from the frustration of paper-based accounting processes in the early 2000s, AvidXchange (NASDAQ: AVDX) provides accounts payable automation software and payment solutions that help middle-market businesses digitize and streamline their invoice processing and payments.
Why Does AVDX Give Us Pause?
- Negative return on equity shows that some of its growth strategies have backfired
At $9.90 per share, AvidXchange trades at 36x forward P/E. If you’re considering AVDX for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. 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 Comfort Systems (+782% 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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