“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. That said, here are three high-flying stocks with big downside risk and some other investments you should consider instead.
nLIGHT (LASR)
Forward P/E Ratio: 160.2x
Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ:LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.
Why Do We Think Twice About LASR?
- Annual revenue growth of 3.8% over the last five years was below our standards for the industrials sector
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning history makes us doubt the long-term viability of its business model
nLIGHT’s stock price of $65.18 implies a valuation ratio of 160.2x forward P/E. Check out our free in-depth research report to learn more about why LASR doesn’t pass our bar.
Artivion (AORT)
Forward P/E Ratio: 39.1x
Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE:AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.
Why Does AORT Give Us Pause?
- Modest revenue base of $458.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.7% for the last five years
- Underwhelming 2.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $20.12 per share, Artivion trades at 39.1x forward P/E. Read our free research report to see why you should think twice about including AORT in your portfolio.
Azenta (AZTA)
Forward P/E Ratio: 39.2x
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ:AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Should You Sell AZTA?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.6% annually over the last two years
- Earnings per share have dipped by 24.8% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Azenta is trading at $22.68 per share, or 39.2x forward P/E. If you’re considering AZTA 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.