"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 are two high-flying stocks expanding their competitive advantages and one climbing an uphill battle.

One High-Flying Stock to Sell:

Exponent (EXPO)

Forward P/E Ratio: 39.3x

Called upon when disasters strike and complex technical questions need answers, Exponent (NASDAQ:EXPO) is a scientific and engineering consulting firm that investigates complex problems and provides solutions across various industries.

Why Does EXPO Worry Us?

1. Subscale operations are evident in its revenue base of $518.5 million, meaning it has fewer distribution channels than its larger rivals
2. Earnings per share lagged its peers over the last two years as they only grew by 5.4% annually
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Exponent is trading at $82.52 per share, or 39.3x forward price-to-earnings. To fully understand why you should be careful with EXPO, check out our full research report (it’s free).

Two High-Flying Stocks to Watch:

Republic Services (RSG)

Forward P/E Ratio: 33.9x

Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.

Why Is RSG Interesting?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 9.3% annual sales growth over the last five years
2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 18.4%, and its operating leverage amplified its profits over the last five years
3. RSG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy

Republic Services’s stock price of $230.58 implies a valuation ratio of 33.9x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Hims & Hers Health (HIMS)

Forward P/E Ratio: 33.3x

Founded in 2017 to make healthcare more accessible, Hims & Hers Health (NYSE:HIMS) provides online healthcare services and personalized treatments for a range of conditions, including hair loss, sexual health, mental health, and skincare.

Why Is HIMS on Our Radar?

1. Customer growth averaged 54.7% over the past two years, showing its ability to "land" new contracts and potentially "expand" them later - a powerful one-two punch for sales
2. Free cash flow margin increased by 17.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
3. Historical investments are beginning to pay off as its returns on capital are growing

At $33.25 per share, Hims & Hers Health trades at 33.3x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.

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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.