1 High-Flying Stock for Long-Term Investors and 2 to Approach with Caution

July 07, 2025 at 00:36 AM EDT

FWRG Cover Image

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.

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 is one high-flying stock expanding its competitive advantage and two where the price is not right.

Two High-Flying Stocks to Sell:

First Watch (FWRG)

Forward P/E Ratio: 45.1x

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

Why Is FWRG Not Exciting?

Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
ROIC of 2.2% reflects management’s challenges in identifying attractive investment opportunities
Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

First Watch’s stock price of $17.66 implies a valuation ratio of 45.1x forward P/E. Dive into our free research report to see why there are better opportunities than FWRG.

Live Nation (LYV)

Forward P/E Ratio: 63.8x

Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.

Why Does LYV Give Us Pause?

Sluggish trends in its events suggest customers aren’t adopting its solutions as quickly as the company hoped
Operating margin of 4.1% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
Free cash flow margin is forecasted to shrink by 1.9 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors

Live Nation is trading at $149.27 per share, or 63.8x forward P/E. Read our free research report to see why you should think twice about including LYV in your portfolio.

One High-Flying Stock to Buy:

Inspire Medical Systems (INSP)

Forward P/E Ratio: 46.7x

Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.

Why Should You Buy INSP?

Growing number of domestic medical centers reflects a desire to reach more customers in underserved markets
Earnings per share grew by 26.7% annually over the last five years, massively outpacing its peers
Free cash flow margin expanded by 48.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

At $128.48 per share, Inspire Medical Systems trades at 46.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 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 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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