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3 High-Flying Stocks with Solid Fundamentals
"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 to hold for the long term.
DraftKings (DKNG)
Forward P/E Ratio: 31.3x
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
Why Do We Watch DKNG?
- Rise in monthly unique players indicates high demand for its offerings
- Market share will likely rise over the next 12 months as its expected revenue growth of 35.7% is robust
- Free cash flow margin is anticipated to expand by 4.2 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
DraftKings is trading at $38.62 per share, or 31.3x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
ESCO (ESE)
Forward P/E Ratio: 32.2x
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Is ESE Interesting?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.1% annual sales growth over the last two years
- Market share is on track to rise over the next 12 months as its 14.3% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 17.6% annually
ESCO’s stock price of $157.79 implies a valuation ratio of 32.2x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Reddit (RDDT)
Forward EV/EBITDA Ratio: 47.2x
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Is RDDT a Top Pick?
- Domestic Daily Active Visitors have increased by an average of 31.7% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 80.5% annually
- Free cash flow margin increased by 43.9 percentage points over the last four years, giving the company more capital to invest or return to shareholders
At $132.10 per share, Reddit trades at 47.2x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started 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 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.