"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.
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 are two high-flying stocks with strong fundamentals and one with big downside risk.
One High-Flying Stock to Sell:
Zurn Elkay (ZWS)
Forward P/E Ratio: 33.4x
Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE: ZWS) provides water management solutions to various industries.
Why Do We Think ZWS Will Underperform?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share decreased by more than its revenue over the last five years, partly because it diluted shareholders
- Free cash flow margin shrank by 5.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Zurn Elkay is trading at $47.35 per share, or 33.4x forward P/E. Dive into our free research report to see why there are better opportunities than ZWS.
Two High-Flying Stocks to Watch:
SoFi (SOFI)
Forward P/E Ratio: 74.6x
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
Why Are We Bullish on SOFI?
- Annual revenue growth of 28.5% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 75.9% over the last two years outstripped its revenue performance
SoFi’s stock price of $27.77 implies a valuation ratio of 74.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Doximity (DOCS)
Forward P/S Ratio: 22.5x
With over 80% of U.S. physicians as members of its digital community, Doximity (NYSE: DOCS) operates a digital platform that enables physicians and other healthcare professionals to collaborate, stay current with medical news, manage their careers, and conduct virtual patient visits.
Why Should DOCS Be on Your Watchlist?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 19.8% over the last year
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Strong free cash flow margin of 48.7% enables it to reinvest or return capital consistently
At $72.47 per share, Doximity trades at 22.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
