"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.
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:
Marcus & Millichap (MMI)
Forward P/E Ratio: 43.9x
Founded in 1971, Marcus & Millichap (NYSE: MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Why Do We Avoid MMI?
- Muted 1% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Marcus & Millichap is trading at $25.99 per share, or 43.9x forward P/E. If you’re considering MMI for your portfolio, see our FREE research report to learn more.
Two High-Flying Stocks to Watch:
CrowdStrike (CRWD)
Forward P/S Ratio: 18.6x
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ: CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
Why Will CRWD Beat the Market?
- Billings have averaged 24% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
At $429.27 per share, CrowdStrike trades at 18.6x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Applied Materials (AMAT)
Forward P/E Ratio: 27.3x
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Positive On AMAT?
- Highly efficient business model is illustrated by its impressive 28.7% operating margin
- Free cash flow margin of 21.7% is higher than many in the industry, giving it breathing room and optionality
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Applied Materials’s stock price of $353.89 implies a valuation ratio of 27.3x 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
