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.
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 expanding its competitive advantage and two where the price is not right.
Two High-Flying Stocks to Sell:
10x Genomics (TXG)
Forward P/E Ratio: 1,301.6x
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ: TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
Why Do We Think TXG Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last two years
- Subscale operations are evident in its revenue base of $616.9 million, meaning it has fewer distribution channels than its larger rivals
- Negative returns on capital show that some of its growth strategies have backfired
10x Genomics’s stock price of $58.51 implies a valuation ratio of 1,301.6x forward P/E. If you’re considering TXG for your portfolio, see our FREE research report to learn more.
Nabors Industries (NBR)
Forward P/E Ratio: 50.5x
Operating one of the largest land-based drilling rig fleets in the world with over 285 rigs across more than 15 countries, Nabors Industries (NYSE: NBR) operates drilling rigs and provides related services to help oil and gas companies drill wells on land and offshore platforms.
Why Are We Wary of NBR?
- Costly operations and weak unit economics result in an inferior gross margin of 39.1% that must be offset through higher production volumes
- Poor free cash flow margin of 1.9% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $88.14 per share, Nabors Industries trades at 50.5x forward P/E. Check out our free in-depth research report to learn more about why NBR doesn’t pass our bar.
One High-Flying Stock to Buy:
Paymentus (PAY)
Forward P/E Ratio: 39.8x
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Will PAY Beat the Market?
- Market share has increased this cycle as its 39.5% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 47.8% over the last two years outstripped its revenue performance
Paymentus is trading at $40.86 per share, or 39.8x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
