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.
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. That said, here are two high-flying stocks with strong fundamentals and one where the price is not right.
One High-Flying Stock to Sell:
Polaris (PII)
Forward P/E Ratio: 33.6x
Founded in 1954, Polaris (NYSE: PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.
Why Do We Pass on PII?
- Flat sales over the last five years suggest it must innovate and find new ways to grow
- Projected 4.7 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Polaris is trading at $55.22 per share, or 33.6x forward P/E. Dive into our free research report to see why there are better opportunities than PII.
Two High-Flying Stocks to Buy:
AppLovin (APP)
Forward P/S Ratio: 16x
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ: APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Should You Buy APP?
- Annual revenue growth of 29.2% over the last two years was superb and indicates its market share is rising
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- APP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
AppLovin’s stock price of $391.65 implies a valuation ratio of 16x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Paymentus (PAY)
Forward P/E Ratio: 32.7x
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Will PAY Outperform?
- Annual revenue growth of 39.5% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 65.8% annually, topping its revenue gains
At $24.36 per share, Paymentus trades at 32.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
