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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?

1. Sluggish trends in its events suggest customers aren’t adopting its solutions as quickly as the company hoped

2. Responsiveness to unforeseen market trends is restricted due to its substandard operating profitability

3. 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. Read our free research report to see why you should think twice about including LYV in your portfolio, it’s free.

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?

1. Bad unit economics and steep infrastructure costs are reflected in its gross margin of 44.1%, one of the worst among software companies

2. Operating margin declined by 39 percentage points over the last year as it scaled

3. 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. If you’re considering SOUN for your portfolio, see our FREE research report to learn more.

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?

1. Modest revenue base of $1.28 billion gives it less fixed cost leverage and fewer distribution channels than larger companies

2. Cash burn makes us question whether it can achieve sustainable long-term growth

3. Push for growth has led to negative returns on capital, signaling value destruction