Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 High-Flying Stocks That Concern Us

KSS Cover Image

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 are three high-flying stocks with big downside risk and some other investments you should consider instead.

Kohl's (KSS)

Forward P/E Ratio: 56.7x

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 Do We Pass on KSS?

  1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
  2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
  3. High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Kohl's is trading at $15.10 per share, or 56.7x forward P/E. Check out our free in-depth research report to learn more about why KSS doesn’t pass our bar.

Estée Lauder (EL)

Forward P/E Ratio: 41.6x

Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE: EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men’s grooming.

Why Are We Wary of EL?

  1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
  2. Operating margin declined by 11.7 percentage points over the last year as its sales cratered
  3. Sales were less profitable over the last three years as its earnings per share fell by 40.8% annually, worse than its revenue declines

At $91.50 per share, Estée Lauder trades at 41.6x forward P/E. Read our free research report to see why you should think twice about including EL in your portfolio.

Somnigroup (SGI)

Forward P/E Ratio: 30.2x

Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE: SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products

Why Are We Cautious About SGI?

  1. 10.1% annual revenue growth over the last two years was slower than its consumer discretionary peers
  2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 9.6% for the last two years
  3. Diminishing returns on capital suggest its earlier profit pools are drying up

Somnigroup’s stock price of $83.95 implies a valuation ratio of 30.2x forward P/E. Dive into our free research report to see why there are better opportunities than SGI.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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-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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

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