1 High-Flying Stock to Own for Decades and 2 We Turn Down

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.

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 with strong fundamentals and two where the price is not right.

Two High-Flying Stocks to Sell:

Allegro MicroSystems (ALGM)

Forward P/E Ratio: 48.9x

The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.

Why Are We Cautious About ALGM?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 14.2% annually over the last two years
2. Earnings per share fell by 17.2% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Investment activity picked up over the last five years, pressuring its weak free cash flow margin of 7.6%

Allegro MicroSystems is trading at $30.73 per share, or 48.9x forward P/E. Dive into our free research report to see why there are better opportunities than ALGM.

Advanced Energy (AEIS)

Forward P/E Ratio: 29.9x

Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.

Why Do We Avoid AEIS?

1. Sales tumbled by 5.9% annually over the last two years, showing market trends are working against its favor during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 9.9% annually, worse than its revenue declines
3. Eroding returns on capital suggest its historical profit centers are aging

At $167.35 per share, Advanced Energy trades at 29.9x forward P/E. Check out our free in-depth research report to learn more about why AEIS doesn’t pass our bar.

One High-Flying Stock to Buy:

Palantir Technologies (PLTR)

Forward P/S Ratio: 93.8x

Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ:PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.

Why Do We Love PLTR?

1. Winning new contracts that can potentially increase in value as its billings growth has averaged 44.2% over the last year
2. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
3. Strong free cash flow margin of 55% enables it to reinvest or return capital consistently

Palantir Technologies’s stock price of $178.27 implies a valuation ratio of 93.8x 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

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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

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