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 climbing an uphill battle.
One High-Flying Stock to Sell:
Zumiez (ZUMZ)
Forward P/E Ratio: 38.6x
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Why Do We Steer Clear of ZUMZ?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Subscale operations are evident in its revenue base of $900.3 million, meaning it has fewer distribution channels than its larger rivals
- Persistent operating margin losses suggest the business manages its expenses poorly
At $20.06 per share, Zumiez trades at 38.6x forward P/E. Dive into our free research report to see why there are better opportunities than ZUMZ.
Two High-Flying Stocks to Watch:
ESCO (ESE)
Forward P/E Ratio: 28.9x
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Are We Backing ESE?
- Projected revenue growth of 14% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Offerings are difficult to replicate at scale and result in a top-tier gross margin of 39.1%
- Additional sales over the last two years increased its profitability as the 22.4% annual growth in its earnings per share outpaced its revenue
ESCO is trading at $207.96 per share, or 28.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Intuitive Surgical (ISRG)
Forward P/E Ratio: 51.9x
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Does ISRG Catch Our Eye?
- Average unit sales growth of 11.4% over the past two years reflects steady demand for its products
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 17.7% annually
Intuitive Surgical’s stock price of $445.08 implies a valuation ratio of 51.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
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 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-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
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