15 Insanely Overvalued Stocks Today

It's not as simple as it may seem to determine whether a stock is overvalued or undervalued. There are lots of different metrics you might assess to make your determination, and some may give you different results. Much can depend on variables such as investing time frames, too: A stock may be deemed overvalued if you only plan to hold it for a few months or a year, but undervalued if you plan to hang on for many years.

Here's another twist: If you look up investor opinions on any given stock, such as those among The Motley Fool articles, you'll often find conflicting views. One writer might see a given stock as a strong buy, while another might be advising investors to steer clear. Reading their arguments, you may even find both convincing. Valuing a stock is partly a subjective endeavor, as much depends on your assumptions and estimates.

It's generally a good idea to focus your dollars on your best investing ideas -- and on stocks that seem undervalued to you. Here are 15 companies whose stocks seem to have gotten ahead of themselves, at least for those who aren't investing with a long holding period in mind.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Elon Musk's electric car company, Tesla (NASDAQ: TSLA), is a classic example of a company where investor opinions diverge -- sharply. Those bearish on Tesla think that its $800 billion market capitalization is way too high, along with its price-to-earnings (P/E) ratio that recently surpassed 1,300! On the other hand, Tesla bulls point out that it's growing rapidly, as is its profit margin.

ALSO READ: 2 Top Growth Stocks to Buy in 2021

Not all seemingly overpriced stocks belong to fast-growing, relatively young companies. Take United Parcel Service (NYSE: UPS), for example. Its trailing P/E ratio was recently 90, well above its five-year average of nearly 23. The picture is less alarming when you look at its forward-looking P/E ratio, which is based on earnings expected over the coming year instead of earnings over the past 12 months. Its forward-looking P/E was recently near 18, only a little above its five-year average. Last year, UPS installed a new CEO, Carol Tomé, who had retired from Home Depot, where she was its chief financial officer. She plans to work on improving profitability, which has been challenged in part by booming residential deliveries, which feature lower margins than business deliveries. Bulls see UPS' future as rosy, due in part to healthcare-related deliveries.

Intuitive Surgical (NASDAQ: ISRG) specializes in robotic surgical equipment -- a niche so exciting that many investors have snapped up shares, driving its value up to a market value recently north of $90 billion -- and a P/E ratio near 87, well above its five-year average of 55.8. That can make it seem like Intuitive Surgical is to be avoided at current levels, but some still see plenty of value -- if you plan to hang on for a decade or more. That's because the company is executing well and collecting a lot of reliable recurring revenue from service contracts and accessories for its very expensive surgical robot systems. In addition, it aims to introduce additional kinds of surgeries that its machines can perform, which will drive further growth and value.

PayPal Holdings (NASDAQ: PYPL) is another stock that seems to be in nosebleed territory, with a recent market value of $329 billion, roughly equivalent to that of Mastercard. Both its current and forward-looking P/E ratios are well above their five-year levels. That might seem steep for the alternative payment system that millions use, but understand that there's more to PayPal than just its flagship PayPal service. For example, it owns Venmo, the person-to-person payment system used widely by younger people, in particular. It also has new services just launched or on the horizon -- including a cryptocurrency investing service and a shopping service, via its acquisition of Honey.

ALSO READ: 3 Unstoppable Stocks That Won't Keep You Awake at Night

Airbnb (NASDAQ: ABNB), the popular alternative lodging specialist, has been trading only for a few months, after having its initial public offering (IPO) late last year. It's clearly been operating successfully, which is why so many investors jumped in -- but that has driven the stock up even higher, so that it recently sported a market value near $120 billion. Think about that -- that's more than Marriott International, with its value near $48 billion; and more than Hilton Worldwide's $31 billion; and far more than Hyatt Hotels' $7.5 billion. In fact, it's more than all of those combined. That clearly seems high. But ... do you believe it might be valued at $250 billion in five or 10 years? If so, it can seem less overvalued. It certainly doesn't offer much margin of safety, though.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Spotify Technology (NYSE: SPOT) -- offering audio streaming of music, podcasts, and more -- has seen its shares more than double over the past year, leaving it with a market capitalization recently topping $60 billion. Bears may want to stay away in part because the company isn't yet profitable, but bulls like its double-digit growth and shrinking losses.

Nike (NYSE: NKE), dominant in athletic footwear and with a meaningful apparel business as well, has surged by more than 40% over the past year, recently sporting a market capitalization of more than $225 billion. Its P/E ratio, recently near 82, is twice that of its five-year average of 41, and even its forward-looking P/E ratio of 37 is well above its five-year average of 30. Nike's future looks rosy, but for best results, you might want to steer clear for now and wait for a pullback in its shares.

ALSO READ: 3 Stocks That Could Set You Up for Life

Shopify (NYSE: SHOP) may not be a familiar name to you, but it's made a lot of investors happy, surging more than sevenfold over the past two years. It offers a platform that helps businesses get e-commerce operations up and running, and bulls see plenty of room for further growth. It can be hard to get beyond its price, though, as its market value was recently $163 billion -- with a P/E ratio north of 800! (Even its forward-looking P/E tops 300.) At such levels, this appears to be a stock best avoided for now -- though if you feel like you really must own some shares of it, you might buy just a small portion of the shares you'd ideally like to own, hoping for a pullback, when you might buy more.

Insurance disrupter Lemonade (NYSE: LMND) is another recent IPO, having debuted on the stock exchange last summer. Its shares have more than doubled in that period, and its market value recently rested near $8 billion. Bulls like how it uses artificial intelligence to save money as it offers insurance policies and how it's aiming to offer more kinds of policies, such as auto insurance. Detractors doubt that Lemonade's business model will sustain it. As one colleague noted, "If it were this easy to produce consistent results without taking on a bunch of tail risk in the insurance industry, it probably would have been done before."

Jumia Technologies (NYSE: JMIA), an Africa-focused e-commerce enterprise, has seen its shares surge more than 1,000% over the past year, and its market value recently sat at $5.5 billion. That may not seem like a high price tag, but note that its price-to-sales ratio has jumped from about 3 in 2019 to 18 in 2020 and to 28 in early February. There's no P/E ratio to report, as the company isn't currently profitable. Bulls appreciate the huge e-commerce potential in Africa (and beyond), while bears see its growth as slowing while its price is steep.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

If there's one stock that best reflects how times changed during the pandemic, it's arguably Zoom Video Communications (NASDAQ: ZM). Its shares have more than quadrupled over the past year, and some months ago, they were up sixfold. Zoom's market capitalization was recently $120 billion, and its backward-looking and forward-looking P/E ratios recently topped 290 and 130, respectively. That's steep, and it has many investors seeing the stock as "too hot to handle," while some see its enhanced videoconferencing technology driving further growth and expect the working-from-home trend to persist beyond the pandemic.

ALSO READ: My 5 Best Stocks to Buy in 2021

If you think you've been seeing a lot of fancy yoga pants around, you're not imagining it. lululemon athletica (NASDAQ: LULU), purveyor of yoga pants (and more), has been enjoying a booming business, with its shares more than doubling over the past two years. Bears think the stock has gotten ahead of itself, but bulls think there's much more growth ahead, and that the company may unseat Nike in the athletic apparel department. Interestingly, Lululemon has bought the digital workout display business Mirror, which may be a successful growth driver.

Unity Software (NYSE: U) has been publicly traded for only about six months, but its shares have surged some 88% since then. The company specializes in video game platforms, and clearly, video games are a huge and growing business. Bulls like its robust growth rate, but bears worry about competition and its lack of profitability.

Pinterest (NYSE: PINS), to those not too familiar with it, may seem like just a sleepy world of crafters. But it's far more than that, with plenty of growth potential, chiefly via monetization of its millions of monthly users -- more than 450 million, at last reporting. Shares have more than tripled over the past two years, and the company's market value was recently $50 billion, with both forward- and backward-looking P/E ratios in the triple digits. Bulls like the company's prospects and growth rates -- its revenue recently jumped 67% year over year -- but bears worry about the price and would rather wait for a pullback.

ALSO READ: 3 High-Growth Stocks That Could Soar

Finally, there's Netflix (NASDAQ: NFLX), which perpetually seems extravagantly priced -- while continuing to grow larger and larger. Its shares have more than doubled over the past three years, and its market value recently topped $240 billion. Its trailing and forward-looking P/E ratios were recently 90 and 56, respectively, which are clearly steep -- but they're actually below their corresponding five-year averages. Bears worry about the price and note that there is some formidable competition out there, such as Disney+, but bulls caution anyone about betting against Netflix, citing its deep pockets and compelling content.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

None of these companies are necessarily bad investments. Each might grow powerfully from here -- especially over the long run. But none of them are bargain priced, and the safest way to build lasting wealth is to seek a margin of safety by buying undervalued stocks. Still, if some of these companies intrigue you, learn more about them -- and then either wait for a pullback, buy a small amount of them to start, or just jump in, if you see their price as reasonable.

This article represents the opinion of the writer(s), who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Selena Maranjian owns shares of Intuitive Surgical, Marriott International, Netflix, PayPal Holdings, and Shopify. The Motley Fool owns shares of and recommends Home Depot, Intuitive Surgical, Lemonade, Inc., Mastercard, Netflix, Nike, PayPal Holdings, Pinterest, Shopify, Spotify Technology, Tesla, Unity Software Inc., and Zoom Video Communications. The Motley Fool recommends Hyatt Hotels, Lululemon Athletica, and Marriott International and recommends the following options: long January 2022 $580 calls on Intuitive Surgical, long January 2022 $75 calls on PayPal Holdings, and short January 2022 $600 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.