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.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. Keeping that in mind, here are two high-flying stocks with strong fundamentals and one with big downside risk.
One High-Flying Stock to Sell:
nLIGHT (LASR)
Forward P/E Ratio: 93.9x
Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ:LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.
Why Are We Cautious About LASR?
- Sales trends were unexciting over the last five years as its 3.8% annual growth was below the typical industrials company
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning history makes us doubt the long-term viability of its business model
At $35.20 per share, nLIGHT trades at 93.9x forward P/E. Dive into our free research report to see why there are better opportunities than LASR.
Two High-Flying Stocks to Watch:
Incyte (INCY)
Forward P/E Ratio: 56.8x
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Why Will INCY Beat the Market?
- Annual revenue growth of 22.8% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow margin expanded by 13 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Improving returns on capital reflect management’s ability to monetize investments
Incyte’s stock price of $112.58 implies a valuation ratio of 56.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
agilon health (AGL)
Forward P/E Ratio: 53.7x
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Do We Watch AGL?
- Impressive 30.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 17.3% annually
- Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency
agilon health is trading at $88.40 per share, or 53.7x forward P/E. Is now the time to initiate a position? See for yourself 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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.