“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 facing an uphill battle and some alternatives you should consider instead.

Smith & Wesson (SWBI)

Forward P/E Ratio: 31x

With a history dating back to 1852, Smith & Wesson (NASDAQ: SWBI) is a firearms manufacturer known for its handguns and rifles.

Why Are We Out on SWBI?

1. Annual sales declines of 13.1% for the past five years show its products and services struggled to connect with the market
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.2% for the last two years
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $14.67 per share, Smith & Wesson trades at 31x forward P/E. Dive into our free research report to see why there are better opportunities than SWBI.

Frontier (ULCC)

Forward P/E Ratio: 23.4x

Recognizable for the colorful animals adorning each aircraft tail, Frontier Group Holdings (NASDAQ: ULCC) is an ultra low-cost airline that provides budget-friendly flights throughout the United States and select international destinations in the Americas.

Why Is ULCC Risky?

1. Sales trends were unexciting over the last two years as its 8.2% annual growth was below the typical consumer discretionary company
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes

Frontier is trading at $6.70 per share, or 23.4x forward P/E. If you’re considering ULCC for your portfolio, see our FREE research report to learn more.

Clean Energy Fuels (CLNE)

Operating the largest network of natural gas fueling stations in North America with over 600 locations, Clean Energy Fuels (NASDAQ: CLNE) supplies renewable natural gas and conventional natural gas as fuel for commercial vehicle fleets.

Why Do We Think CLNE Will Underperform?

1. Sales trends were unexciting over the last five years as its 9.2% annual growth was below the typical energy upstream and integrated energy company
2. Subscale operations are evident in its revenue base of $438.6 million, meaning it has fewer distribution channels than its larger rivals
3. Costly operations and weak unit economics result in an inferior gross margin of 24.4% that must be offset through higher production volumes

Clean Energy Fuels’s stock price of $1.94 implies a lofty valuation ratio. Check out our free in-depth research report to learn more about why CLNE doesn’t pass our bar.

Stocks We Like More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.