1 High-Flying Stock with Impressive Fundamentals and 2 We Find Risky
"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.
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 is one high-flying stock to hold for the long term and two climbing an uphill battle.
Two High-Flying Stocks to Sell:
Zillow (ZG)
Forward P/E Ratio: 32.6x
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.
Why Are We Out on ZG?
- Sales tumbled by 6.6% annually over the last five years, showing consumer trends are working against its favor
- Low free cash flow margin of 11.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $68.23 per share, Zillow trades at 32.6x forward P/E. If you’re considering ZG for your portfolio, see our FREE research report to learn more.
Azenta (AZTA)
Forward P/E Ratio: 42.4x
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ:AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Is AZTA Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.5% annually over the last two years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 18.8% annually, worse than its revenue
- Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
Azenta is trading at $33.26 per share, or 42.4x forward P/E. Dive into our free research report to see why there are better opportunities than AZTA.
One High-Flying Stock to Buy:
American Superconductor (AMSC)
Forward P/E Ratio: 33.7x
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
Why Are We Bullish on AMSC?
- Annual revenue growth of 49% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow turned positive over the last five years, indicating the company has passed a significant test
- Rising returns on capital show the company is starting to reap the benefits of its past investments
American Superconductor’s stock price of $28.79 implies a valuation ratio of 33.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.