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.
Finding the right balance between price and quality can challenge even the most skilled investors. Luckily for you, we started StockStory to help you identify the real opportunities. That said, here are three high-flying stocks expanding their competitive advantages.
Palantir (PLTR)
Forward P/S Ratio: 75.2x
Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE: PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.
Why Will PLTR Beat the Market?
- Billings have averaged 38.6% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Robust free cash flow margin of 47.2% gives it many options for capital deployment
At $123.35 per share, Palantir trades at 75.2x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Graham Corporation (GHM)
Forward P/E Ratio: 30.9x
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Is GHM a Good Business?
- Market share has increased this cycle as its 17% annual revenue growth over the last five years was exceptional
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 298% annually
- Free cash flow margin jumped by 5.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Graham Corporation is trading at $36.77 per share, or 30.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Cintas (CTAS)
Forward P/E Ratio: 47.6x
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Should You Buy CTAS?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 8.6% annual sales growth over the last two years
- Adjusted operating margin improvement of 4.9 percentage points over the last five years demonstrates its ability to scale efficiently
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
Cintas’s stock price of $221.04 implies a valuation ratio of 47.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
