Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match. The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. That said, here are three high-flying stocks where the price is not right and some other investments you should look into instead.
Live Nation (LYV)
Forward P/E Ratio: 60.6x
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.
Why Are We Hesitant About LYV?
- Sluggish trends in its events suggest customers aren’t adopting its solutions as quickly as the company hoped
- Responsiveness to unforeseen market trends is restricted due to its substandard operating profitability
- Free cash flow margin is forecasted to shrink by 1.9 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Live Nation is trading at $138.98 per share, or 60.6x forward P/E. Dive into our free research report to see why there are better opportunities than LYV.
SoundHound AI (SOUN)
Forward P/S Ratio: 31.2x
Founded in 2005, SoundHound AI (NASDAQ: SOUN) develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.
Why Are We Cautious About SOUN?
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 44.1%, one of the worst among software companies
- Operating margin declined by 39 percentage points over the last year as it scaled
- Cash-burning history makes us doubt the long-term viability of its business model
At $11.76 per share, SoundHound AI trades at 31.2x forward price-to-sales. To fully understand why you should be careful with SOUN, check out our full research report (it’s free).
LifeStance Health Group (LFST)
Forward P/E Ratio: 75.7x
With over 6,600 licensed mental health professionals treating more than 880,000 patients annually, LifeStance Health (NASDAQ: LFST) provides outpatient mental health services through a network of clinicians offering psychiatric evaluations, psychological testing, and therapy across 33 states.
Why Does LFST Give Us Pause?
- Modest revenue base of $1.28 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Push for growth has led to negative returns on capital, signaling value destruction
LifeStance Health Group’s stock price of $5.74 implies a valuation ratio of 75.7x forward P/E. Read our free research report to see why you should think twice about including LFST in your portfolio.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
