"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.

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. Keeping that in mind, here is one high-flying stock with strong fundamentals and two climbing an uphill battle.

Two High-Flying Stocks to Sell:

Floor And Decor (FND)

Forward P/E Ratio: 42.7x

Operating large, warehouse-style stores, Floor & Decor (NYSE: FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Why Does FND Worry Us?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
2. Subscale operations are evident in its revenue base of $4.6 billion, meaning it has fewer distribution channels than its larger rivals
3. ROIC of 9.3% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

Floor And Decor’s stock price of $82 implies a valuation ratio of 42.7x forward P/E. If you’re considering FND for your portfolio, see our FREE research report to learn more.

First Watch (FWRG)

Forward P/E Ratio: 61.1x

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 Does FWRG Give Us Pause?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

First Watch is trading at $17.09 per share, or 61.1x forward P/E. Read our free research report to see why you should think twice about including FWRG in your portfolio.

One High-Flying Stock to Watch:

WD-40 (WDFC)

Forward P/E Ratio: 37.3x

Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.

Why Does WDFC Catch Our Eye?

1. Products command premium prices and result in a stellar gross margin of 53.8%
2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
3. ROIC punches in at 27.5%, illustrating management’s expertise in identifying profitable investments

At $221.46 per share, WD-40 trades at 37.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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-micro-cap company Kadant (+351% 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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