"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?
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Rise in monthly unique players indicates high demand for its offerings
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Market share will likely rise over the next 12 months as its expected revenue growth of 35.7% is robust
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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 full 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?
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Offerings and unique value proposition resonate with customers, as seen in its above-market 9.1% annual sales growth over the last two years
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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
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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?
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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
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Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 80.5% annually
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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 comprehensive 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 .