“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. Keeping that in mind, here are two high-flying stocks to hold for the long term and one with big downside risk.
One High-Flying Stock to Sell:
Palo Alto Networks (PANW)
Forward P/S Ratio: 16.8x
Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ: PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.
Why Are We Cautious About PANW?
- Gross margin of 72% reflects its relatively high servicing costs
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 1.5 percentage points
At $268.74 per share, Palo Alto Networks trades at 16.8x forward price-to-sales. To fully understand why you should be careful with PANW, check out our full research report (it’s free).
Two High-Flying Stocks to Buy:
HEICO (HEI)
Forward P/E Ratio: 52.3x
Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
Why Should You Buy HEI?
- Annual revenue growth of 18.3% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 32.7% annually over the last two years and trumped its peers
- Strong free cash flow margin of 17.4% enables it to reinvest or return capital consistently
HEICO’s stock price of $330.67 implies a valuation ratio of 52.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
ESCO (ESE)
Forward P/E Ratio: 34.5x
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 Is ESE a Good Business?
- Annual revenue growth of 12.3% 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 38.4% annually, topping its revenue gains
- Free cash flow margin grew by 10.9 percentage points over the last five years, giving the company more chips to play with
ESCO is trading at $298.25 per share, or 34.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
