“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.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. That said, here are three high-flying stocks where the price is not right and some other investments you should look into instead.
Monro (MNRO)
Forward P/E Ratio: 51.1x
Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Why Are We Out on MNRO?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Earnings per share have contracted by 54.2% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Monro’s stock price of $12.60 implies a valuation ratio of 51.1x forward P/E. Dive into our free research report to see why there are better opportunities than MNRO.
Caesars Entertainment (CZR)
Forward P/E Ratio: 88.6x
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ:CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Why Do We Think CZR Will Underperform?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 10% for the last five years
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Caesars Entertainment is trading at $29.68 per share, or 88.6x forward P/E. Read our free research report to see why you should think twice about including CZR in your portfolio.
Heartland Express (HTLD)
Forward P/E Ratio: 49.3x
Founded by the son of a trucker, Heartland Express (NASDAQ:HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Is HTLD Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 18.8% annually over the last two years
- Free cash flow margin shrank by 14.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $12.38 per share, Heartland Express trades at 49.3x forward P/E. If you’re considering HTLD for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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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.