“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.
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 is one high-flying stock to hold for the long term and two facing an uphill battle.
Two High-Flying Stocks to Sell:
Live Nation (LYV)
Forward P/E Ratio: 128.5x
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 Are We Bearish on LYV?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 5.1% for the last two years
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Free cash flow margin is forecasted to shrink by 1.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
At $181.26 per share, Live Nation trades at 128.5x forward P/E. Check out our free in-depth research report to learn more about why LYV doesn’t pass our bar.
Solaris Energy Infrastructure (SEI)
Forward P/E Ratio: 75.7x
After acquiring Mobile Energy Rentals in 2024 to enter the distributed power market, Solaris Energy Infrastructure (NYSE: SEI) leases mobile power equipment and provides logistics services for oil and gas well completion.
Why Does SEI Worry Us?
- Modest revenue base of $762.2 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Gross margin of 42.6% reflects its high production costs and unfavorable asset base
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Solaris Energy Infrastructure is trading at $54.25 per share, or 75.7x forward P/E. Read our free research report to see why you should think twice about including SEI in your portfolio.
One High-Flying Stock to Watch:
Costco (COST)
Forward P/E Ratio: 43.7x
Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ: COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.
Why Do We Watch COST?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 6.6% over the past two years
- Unparalleled revenue scale of $293.6 billion offsets its poor gross margin and gives it advantageous pricing and terms with suppliers
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
Costco’s stock price of $934.60 implies a valuation ratio of 43.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
