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 are three high-flying stocks expanding their competitive advantages.
Chipotle (CMG)
Forward P/E Ratio: 38.6x
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Why Is CMG a Top Pick?
- Aggressive strategy of rolling out new restaurants to gobble up whitespace is prudent given its same-store sales growth
- Same-store sales growth averaged 6.2% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Unparalleled revenue scale of $11.49 billion gives it advantageous pricing and terms with suppliers
Chipotle is trading at $50.66 per share, or 38.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
CSW (CSWI)
Forward P/E Ratio: 31.7x
With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSWI) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Will CSWI Outperform?
- Impressive 17.9% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Excellent operating margin of 18.8% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 17.6% over the last two years outstripped its revenue performance
CSW’s stock price of $300 implies a valuation ratio of 31.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Axon (AXON)
Forward P/E Ratio: 122.8x
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
Why Should You Buy AXON?
- Average unit sales growth of 32% over the past two years reflects steady demand for its products
- Free cash flow margin grew by 20.3 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show the company is starting to reap the benefits of its past investments
At $729.99 per share, Axon trades at 122.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
