Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
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 is one high-flying stock expanding its competitive advantage and two where the price is not right.
Two High-Flying Stocks to Sell:
Lattice Semiconductor (LSCC)
Forward P/E Ratio: 62.1x
A global leader in its category, Lattice Semiconductor (NASDAQ:LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.
Why Is LSCC Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 18.4% annually over the last two years
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 18.8 percentage points
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 5.5% annually
At $84.22 per share, Lattice Semiconductor trades at 62.1x forward P/E. If you’re considering LSCC for your portfolio, see our FREE research report to learn more.
CAVA (CAVA)
Forward P/E Ratio: 119x
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Does CAVA Worry Us?
- Operating margin of 4.6% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Earnings per share have dipped by 15.6% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show that some of its growth strategies have backfired
CAVA is trading at $66.25 per share, or 119x forward P/E. To fully understand why you should be careful with CAVA, check out our full research report (it’s free).
One High-Flying Stock to Buy:
SPX Technologies (SPXC)
Forward P/E Ratio: 29.7x
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE:SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Do We Love SPXC?
- Annual revenue growth of 12.7% over the past two years was outstanding, reflecting market share gains this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 23% annually
SPX Technologies’s stock price of $211 implies a valuation ratio of 29.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.