"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.

Determining whether a company’s quality justifies its price causes headaches for nearly all investors, which is why we started StockStory - to help you separate the real opportunities from the speculative ones. 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.

Marcus & Millichap (MMI)

Forward P/E Ratio: 297.1x

Founded in 1971, Marcus & Millichap (NYSE: MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.

Why Is MMI Risky?

1. Annual sales declines of 3.2% for the past five years show its products and services struggled to connect with the market
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Marcus & Millichap is trading at $29.71 per share, or 297.1x forward P/E. If you’re considering MMI for your portfolio, see our FREE research report to learn more.

NN (NNBR)

Forward P/E Ratio: 316.1x

Formerly known as Nuturn, NN (NASDAQ: NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Do We Think NNBR Will Underperform?

1. Annual sales declines of 1.3% for the past five years show its products and services struggled to connect with the market during this cycle
2. Sales were less profitable over the last five years as its earnings per share fell by 16.9% annually, worse than its revenue declines
3. Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model

At $2.09 per share, NN trades at 316.1x forward P/E. Read our free research report to see why you should think twice about including NNBR in your portfolio.

CoStar (CSGP)

Forward P/E Ratio: 73.9x

With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ: CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.

Why Are We Wary of CSGP?

1. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 23.7 percentage points
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 4% annually while its revenue grew
3. Free cash flow margin dropped by 16.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up

CoStar’s stock price of $78.52 implies a valuation ratio of 73.9x forward P/E. To fully understand why you should be careful with CSGP, check out our full research report (it’s free).

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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.