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.
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. That said, here are three high-flying stocks where the price is not right and some other investments you should look into instead.
Hilton (HLT)
Forward P/E Ratio: 36.3x
Founded in 1919, Hilton Worldwide (NYSE:HLT) is a global hospitality company with a portfolio of hotel brands.
Why Do We Pass on HLT?
- Softer revenue per room over the past two years suggests it might have to invest in new amenities such as restaurants and bars to attract customers
- Poor expense management has led to an operating margin of 22.1% that is below the industry average
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.4 percentage points over the next year
Hilton’s stock price of $335.20 implies a valuation ratio of 36.3x forward P/E. Dive into our free research report to see why there are better opportunities than HLT.
Landstar (LSTR)
Forward P/E Ratio: 35.9x
Covering billions of miles throughout North America, Landstar (NASDAQ:LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Should You Dump LSTR?
- Sales tumbled by 2.8% annually over the last two years, showing market trends are working against it during this cycle
- Earnings per share fell by 8.1% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Waning returns on capital imply its previous profit engines are losing steam
Landstar is trading at $213.77 per share, or 35.9x forward P/E. To fully understand why you should be careful with LSTR, check out our full research report (it’s free).
Myriad Genetics (MYGN)
Forward P/E Ratio: 37.7x
Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.
Why Do We Steer Clear of MYGN?
- 3.5% annual revenue growth over the last two years was slower than its healthcare peers
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $4.28 per share, Myriad Genetics trades at 37.7x forward P/E. Read our free research report to see why you should think twice about including MYGN in your portfolio.
Stocks We Like More
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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.