"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 with strong fundamentals and two with big downside risk.
Two High-Flying Stocks to Sell:
Old Dominion Freight Line (ODFL)
Forward P/E Ratio: 39x
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ: ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Why Does ODFL Worry Us?
- Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
- Earnings per share have dipped by 7.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Old Dominion Freight Line is trading at $196.63 per share, or 39x forward P/E. To fully understand why you should be careful with ODFL, check out our full research report (it’s free).
Kratos (KTOS)
Forward P/E Ratio: 112.1x
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Are We Hesitant About KTOS?
- Operating margin of 2.1% decreased from an already low base, demonstrating the tradeoff between growth and profitability
- Free cash flow margin shrank by 8.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Low returns on capital reflect management’s struggle to allocate funds effectively
Kratos’s stock price of $92.12 implies a valuation ratio of 112.1x forward P/E. If you’re considering KTOS for your portfolio, see our FREE research report to learn more.
One High-Flying Stock to Watch:
Coherent (COHR)
Forward P/E Ratio: 37.3x
Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.
Why Is COHR on Our Radar?
- Annual revenue growth of 16.6% over the last two years was superb and indicates its market share increased during this cycle
- Projected revenue growth of 24.2% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 69.9% annually
At $254.45 per share, Coherent trades at 37.3x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
