3 High-Flying Stocks We Find Risky

"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.

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 are three high-flying stocks where the price is not right and some other investments you should look into instead.

Custom Truck One Source (CTOS)

Forward P/E Ratio: 62.4x

Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment.

Why Does CTOS Worry Us?

1. Muted 4.1% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Free cash flow margin dropped by 24.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Custom Truck One Source’s stock price of $6.03 implies a valuation ratio of 62.4x forward P/E. If you’re considering CTOS for your portfolio, see our FREE research report to learn more.

SiteOne (SITE)

Forward P/E Ratio: 35.5x

Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.

Why Are We Wary of SITE?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 12.2% annually
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $147.22 per share, SiteOne trades at 35.5x forward P/E. To fully understand why you should be careful with SITE, check out our full research report (it’s free).

SoundHound AI (SOUN)

Forward P/S Ratio: 26.9x

Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ:SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.

Why Does SOUN Give Us Pause?

1. Sky-high servicing costs result in an inferior gross margin of 40.5% that must be offset through increased usage
2. Operating margin fell by 43.6 percentage points over the last year as it prioritized growth over profits
3. Negative free cash flow raises questions about the return timeline for its investments

SoundHound AI is trading at $12.77 per share, or 26.9x forward price-to-sales. Check out our free in-depth research report to learn more about why SOUN doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 Tecnoglass (+1,754% 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.