1 High-Flying Stock with Exciting Potential and 2 We Find Risky

Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.

Determining whether a company’s quality justifies its price causes headaches for nearly all investors, which is why we started StockStory - to help you separate the real opportunities from the speculative ones. Keeping that in mind, here is one high-flying stock with strong fundamentals and two climbing an uphill battle.

Two High-Flying Stocks to Sell:

Guidewire Software (GWRE)

Forward P/S Ratio: 14.2x

With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.

Why Are We Hesitant About GWRE?

1. Sales trends were unexciting over the last three years as its 12.6% annual growth was below the typical software company
2. Gross margin of 61.9% reflects its relatively high servicing costs

Guidewire Software’s stock price of $216.15 implies a valuation ratio of 14.2x forward price-to-sales. Check out our free in-depth research report to learn more about why GWRE doesn’t pass our bar.

NN (NNBR)

Forward P/E Ratio: 65.7x

Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.

Why Do We Pass on NNBR?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.6% annually over the last two years
2. Negative free cash flow raises questions about the return timeline for its investments
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

NN is trading at $2.30 per share, or 65.7x forward P/E. If you’re considering NNBR for your portfolio, see our FREE research report to learn more.

One High-Flying Stock to Watch:

Apple (AAPL)

Forward P/E Ratio: 30.3x

Creator of the iPhone and App Store, Apple (NASDAQ:AAPL) is a legendary developer of consumer electronics and software.

Why Is AAPL Interesting?

1. Apple's revenue base is so large because nearly everyone in the U.S. has an iPhone, but this is a double-edged sword. Growth must now come from upgrades, a harder pitch that has resulted in sluggish top-line performance recently.
2. Still, Apple's devices have endured for decades, speaking to its brand, design ethos, and technological chops. Its success is rare in the world of consumer electronics, which is fraught because of commoditization, competition, and obsolescence risk.
3. The company may not have the best gross margin because of its hardware orientation, but it still manages to produce elite operating and free cash flow margins. This shows it doesn’t need over-the-top marketing campaigns to convince people to buy its products.

At $225.64 per share, Apple trades at 30.3x forward price-to-earnings. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

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 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% 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

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