In this article, we will be looking at 10 stocks with high PE ratios that are getting dumped by insiders.
The U.S. stock market has turned into a theater of extremes right now. Growth stocks are seeing an abnormal price hike, but in some cases, it is almost proportionately met with the insiders cashing out. The flood of insider sales in companies trading at unbelievable price-to-earnings (PE) ratios has become the prime example of what would happen when euphoria crashes with caution.
But why are corporate executives – the insiders who know the company best- selling shares when investors are piling in on them? Let’s connect the dots.
READ ALSO: 20 Large-Cap Stocks Insiders and Short Sellers Are Dumping Like Crazy
Growth stocks continue to be at the center of attraction in 2025. They have been outperforming their value counterpart over the past decade, fueled by declining interest rates and increasing bets on innovation. Even when the Fed hiked the rates in 2023, growth stocks strived under pressure, with some sectors continuing to command premium valuations.
Many of these companies are now trading at PE ratios that even optimistic analysts could not justify. For that reason, insiders are selling, and they are doing it aggressively.
Retail investors chase fast-paced moments while corporate executives and major stakeholders pull their investments from the company. Data from the SEC’s Form 4 filings reveal that insider sales for high-PE firms have increased recently, reflecting a widening gap between Wall Street’s optimism and Main Street’s reality.
It is yet to be decided whether these sales are a vote of no confidence in the insanely high valuations or simply prudent profit-taking. To answer this, we need to look at the broader economic environment. Recently, President Trump proposed a $163 billion budget cut, which involves slashing domestic programs while concentrating on defense and border security. The reduced funding for housing, education, and healthcare could hurt consumer spending, and hence, the cut has introduced fresh uncertainty into a market where investors are already scrambling due to interest rate and tariff rate uncertainties.
On the other hand, the Treasury bond market is also flashing warning signs. According to a report by Reuters, two-year yields have declined to 3.57%, nearly a full percentage point below the Fed’s benchmark rate. Treasury Secretary Scott Bessent calls the gap a clear signal for rate cuts. When we look back at history, we will see that these dislocations usually preceded economic slowdowns, and in such an environment, the high PE stocks that could not meet the inflated expectations with their earnings will fall.
That said, high PE ratios are not always bad. They often reflect the market’s confidence in the company’s future growth. But when insiders start to dump the stocks amid geopolitical disturbances and rate cut debates, we cannot help but wonder whether this is calm before a storm. And it is here we must exercise caution. From our picks, you could see a red flag or a buying opportunity. However, one thing is clear. In today’s market, ignoring the warning signs could be the riskiest move.
With this in mind, let’s count down our picks from 10 to 1. Stay with us as we unveil the top 5, which may already be part of your portfolio.
A stock market data. Photo by Alesia Kozik on Pexels
Our Methodology
We have followed a few criteria when putting together our list of 10 stocks with unbelievably high PE ratios, being sold by insiders. All the stocks in the list have a PE ratio of 35 or more, which defines the term insanely-high for our article. We have further reduced the number of stocks to 10 by considering only those with an insider selling of 5% change or more in the last 6 months. This is to ensure that the potential investors are aware of the change in institutional mindset for stocks with an upward-trending PE ratio. Based on this insider selling, our picks have been ranked from 10 to 1. All the data in the article was taken from financial databases and analyst reports, with all information updated as of May 05, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Kodiak Gas Services, Inc. (NYSE:KGS)
P/E Ratio: 58.67
Insider Transaction: -29.52%
Texas-based company, Kodiak Gas Services, Inc. (NYSE:KGS), is a leader in contract compression services for the oil and gas industry across the U.S. The company specializes in large-horsepower natural gas compression and supports upstream and midstream operations. Amid tough competitors like Archrock and USA Compression Partners, Kodiak Gas Services, Inc. (NYSE:KGS) differentiates itself through operational reliability, scale, and customer service. Challenges, however, like changes in natural gas production levels, infrastructure investment, and energy transition policies, continue to affect the company’s performance. It is among the stocks that insiders are selling.
Reaching $1.2 billion in the fourth quarter of 2025, Kodiak Gas Services, Inc. (NYSE:KGS) has achieved a 36% growth in total revenue, offering some justification for its abnormal pricing. The successful integration of the CSI acquisition has allowed for cost savings that surpassed the initial expectations. On the other hand, the 5% sequential decline in Q4 revenue owing to the divestiture of low-margin non-core horsepower is raising concerns. Labor constraints in the Permian Basin and supply chain constraints, including establishing shops for building compressors and managing equipment delivery times, also affect the company’s operational performance.
Kodiak Gas Services, Inc. (NYSE:KGS) exhibits a high P/E ratio of 58.67, suggesting a potentially overvalued stock. The investors’ concern is high, with insider selling standing at 29.52%, announcing a notable number of insider withdrawals from the company. Together, these values signal that those with intimate company knowledge find it difficult to justify the current price.
9. Vericel Corporation (NASDAQ:VCEL)
P/E Ratio: 212.68
Insider Transaction: -30.02%
Vericel Corporation (NASDAQ:VCEL) is a biopharmaceutical company headquartered in Massachusetts. The focus is on advanced cell therapies for sports medicine and severe burn care. The company’s key products, MACI and Epicel, are FDA-approved and produced in-house. Vericel Corporation (NASDAQ:VCEL) operates in a specialized market with limited direct competition, prioritizing regenerative medicine and orthobiologics. Despite challenges, including changing surgical demand trends and FDA regulations, the continued investment in clinical research and capacity expansion helps sustain growth.
In 2024, Vericel Corporation (NASDAQ:VCEL) achieved a total revenue of $237 million, reaching a growth of 20% compared to the previous year. Specifically, with increased surgeon engagement, the fourth quarter revenue grew by 21% year-over-year and 53% sequentially. Adding to the positive outlook is a 22% revenue increase in the Burn Care franchise in 2024, with Nexobrid hospital orders witnessing a 42% growth in Q4. With respect to 2025, however, the company anticipates a decrease in capital expenditure, which is likely to negatively influence future growth investments. $10 million in incremental expenses from the completion of the new facility is further expected to impact the company’s net income.
A few figures further point to a scenario where optimism in the market is mismatched with insider sentiment. Primarily, the massive P/E ratio of 212.68 places Vericel Corporation (NASDAQ:VCEL), which implies substantial investor expectations for future growth. However, the negative 30.02% rise in insider selling activity indicates an increasing level of internal caution.
8. Dutch Bros Inc. (NYSE:BROS)
P/E Ratio: 175.82
Insider Transaction: -33.81%
Dutch Bros Inc. (NYSE:BROS) is a rapidly expanding drive-thru coffee chain in the U.S., based in Oregon. The company targets younger demographics through lifestyle branding and mobile engagement. Starbucks, Peet’s Coffee, and Dunkin’ dominate the market. However, by leveraging its franchise-light model and energetic brand identity, the company gains market share. Dutch Bros Inc. (NYSE:BROS) expands store count across the Sun Belt and Midwest regions and uses the strength of regional customer loyalty in a competitive foodservice environment to support stable revenue.
Dutch Bros Inc. (NYSE:BROS) has opened 151 new shops in 2021, leading to an 18% increase in the number of shops. The company has also realized a 33% growth in total revenue during the year, partly contributed by a 5.3% system same-store sales growth. However, the company is planning to make investments in 2025, which may offset financial growth achieved through sales. The growing construction costs and the uncertain tariff rates could potentially raise the capital expenditure of new shops to approximately $250 million, which would impact the development pipeline.
The company has a P/E value of 175.82, which, in addition to aggressive expansion, points to confidence in the company’s long-term profitability. Meanwhile, Dutch Bros Inc. (NYSE:BROS)’s 33.81% change in insider transactions raises questions about insiders’ confidence in the company’s ability to meet these expectations. It is among the stocks insiders are selling.
7. CAVA Group, Inc. (NYSE:CAVA)
P/E Ratio: 87.10
Insider Transaction: -37.07%
Based in Washington, D.C., CAVA Group, Inc. (NYSE:CAVA) is a fast-casual Mediterranean restaurant chain focusing on healthy, customizable meals. The company gains a strong foothold in the sector by operating company-owned locations and producing branded retail items through its vertically integrated model. Its business strategy prioritizes digital innovation, supply chain control, and health-conscious consumer preferences. Market penetration in the suburban regions and menu innovation drive the company’s growth. Food inflation and real estate availability affect the company’s long-term profitability and scalability. CAVA is one of the stocks that insiders are selling.
CAVA Group, Inc. (NYSE:CAVA) ended 2024 with 367 locations, resulting in an 18.8% increase in locations year-over-year. In Q4 2022, this contributed to a 36.8% increase in revenue. Meanwhile, food, beverage, and packaging costs have grown owing to the national rollout of steak, leading to a decrease in net income. For 2025, CAVA Group, Inc. (NYSE:CAVA) anticipates stock-based compensation to reach a new range of $20 million and $22 million, further impacting the company’s margin alongside continued investments in team member wages.
CAVA Group, Inc. (NYSE:CAVA)’s elevated P/E ratio of 87.10 indicates that the stock trades at a price higher than its intrinsic value. At the same time, the surge in insider selling of 37.07% suggests that the executives are possibly trying to capitalize on the elevated share price rather than betting on the future appreciation of their investment.
6. Palo Alto Networks, Inc. (NASDAQ:PANW)
P/E Ratio: 106.28
Insider Transaction: -41.03%
A global cybersecurity firm, Palo Alto Networks, Inc. (NASDAQ:PANW) offers network security and threat intelligence solutions. Along with Fortinet, Check Point, and Cisco, there is also tough competition for the company. However, Palo Alto Networks, Inc. (NASDAQ:PANW) maintains a strong position through integrated platforms like Prisma and Cortex. The company uses AI-driven analytics and recurring subscription revenue models to gain an upward momentum. Demand for zero-trust architecture and cloud-native security tools also allows for international expansion opportunities in enterprise markets.
Palo Alto Networks, Inc. (NASDAQ:PANW) achieved revenue of $2.26 billion in the fourth quarter of 2024, beating the anticipated value by 0.9%. For 2024, the company has surpassed its midpoint guidance of $9.15 billion. However, some users find the pricing for the services a significant hurdle. In particular, they consider the price too high for features like Prisma Access and Cortex XDR. While this may affect the revenue stream for the company in 2025, other challenges like high costs, complex deployment and configuration, and the need for ongoing maintenance and patching also have a notable impact on the company’s growth in the sector.
Palo Alto Networks, Inc. (NASDAQ:PANW)’s P/E ratio stands high at 106.28. One of the highest in our selection, the value reflects sky-high market expectations. Meanwhile, insider selling is increasing by 41.03%, projecting a less optimistic internal mindset towards the market and the company, and signals caution.
5. Pitney Bowes Inc. (NYSE:PBI)
P/E Ratio: 182.59
Insider Transaction: -43.34%
Operating from Connecticut, a shipping and mailing company, Pitney Bowes Inc. (NYSE:PBI) offers logistics, e-commerce, and mailing technology services across the globe. FedEx and Stamps.com pose high competition in the market, but the company’s focus on digital transformation of physical mail and small parcel logistics for mid-sized businesses earns it a notable position in the industry. Trends in e-commerce volumes, USPS partnerships, and technological innovation in mailing automation affect the company’s performance. However, through cost containment and strategic divestitures, Pitney Bowes Inc. (NYSE:PBI) attempts to grow its profitability.
Compared to the previous year, Pitney Bowes Inc. (NYSE:PBI) saw a 34% growth in its adjusted EPS in 2024. The growth in earnings is also accompanied by a decline in costs, with $120 million in annualized savings by the end of 2024. On the other hand, there is a 3% decline in revenue. Specifically, SendTech’s 16% year-over-year decline in revenue in Q4 2024 indicates a fall in demand for the subsidiary’s products. Furthermore, due to headwinds in SendTech, the company anticipates a notable decline in revenue in 2025. Exiting the global e-commerce segment also adds pressure to the company’s growth in the upcoming period.
A P/E ratio of 182.59 places Pitney Bowes Inc. (NYSE:PBI) at the top of industry valuation and suggests that the stock may be priced for strong earnings growth. However, the 43.34% upward surge in insider selling indicates a substantial shift in ownership, reflecting a more tempered internal outlook.
4. Ares Management Corporation (NYSE:ARES)
P/E Ratio: 79.64
Insider Transaction: -50.42%
Ares Management Corporation (NYSE:ARES), based in California, is a leading global alternative asset manager. The company operates across credit, private equity, real estate, and infrastructure. Differentiating itself through its flexible capital solutions and scalable investment platforms across geographies, the company competes with significant peers like Blackstone and Apollo Global Management. There is continuous growth in the company’s assets under management owing to institutional demand for yield in a low-rate environment, but future performance relies heavily on regulatory changes and macroeconomic conditions. It is among the stocks insiders are selling.
In Q4 of 2024, the company reported its eighth consecutive NAV growth, reaching $19.89 per share. It also had a record high in new commitments of $15 billion, two times more than in 2023. Ares Management Corporation (NYSE:ARES) is the highest-rated Business Development Company (BDC) among the three top rating agencies. However, core earnings per share declined in Q4 of 2024 and Q1 of 2025 to $0.50. Along with potential impacts from changes in new government policies, the net realized losses of $61 million and net unrealized losses of $63 million in Q1 2025 further cause concerns over the company’s growth prospects.
Ares Management Corporation (NYSE:ARES) carries a high P/E ratio of 79.64, revealing massive investor expectations for the company in the sector. The sharp 50.42% increase in insider selling over the last six months points to an offloading of shares at a rate inconsistent with long-term confidence, raising red flags regarding the company’s ability to sustain its current valuation.
3. CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS)
P/E Ratio: 226.35
Insider Transaction: -50.48%
CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) provides cloud-based AI and analytics software to the automotive, insurance, and collision repair industries. The company’s client base is comprised of insurers and repair shops. The company operates in Illinois and facilitates claims processing, estimating, and digital customer engagement for its clients. CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS)’s recurring revenue model and long-term client contracts support its financial stability, while digital transformation in insurance workflows and automotive repair technology adoption in North America ensure continuous growth for the company.
CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) reported a strong revenue growth of 8% year-over-year in Q4 2024. By adding over 1,000 new collision repair facilities, the company has expanded its network in the sector. Another significant contributor to this expansion strategy is the growth in active technology and service providers of 200. Meanwhile, the company anticipates a moderate EBITDA loss in 2025, owing to the integration of EvolutionIQ. However, with a 9% year-over-year decline in auto physical damage in Q1 2025, the company’s value may be affected later in the year.
CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS)’s massive P/E ratio of 226.35 implies extreme bullishness incorporated into the price. It far surpasses the traditional valuation benchmarks. Insider selling, however, climbed by 50.48%, indicating that the internal investors are capitalizing on the premium market perception, which, from the external investors’ point of view, should represent an overheated stock.
2. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)
P/E Ratio: 61.36
Insider Transaction: -52.97%
Headquartered in Florida, First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is a daytime dining chain that offers breakfast, brunch, and lunch across the U.S. Competing with tough players like Denny’s, the company gains a competitive advantage through fresh, made-to-order menu offerings and a no-franchise model for quality control. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)’s primary target is suburban markets with significant foot traffic and many families. Labor availability, food cost inflation, and consumer preferences towards casual dining influence the company’s performance. It is among the stocks insiders are selling.
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) has recently announced its Q1 2025 results, which reported a 16.51% year-over-year growth. It also established 13 new system-wide restaurants across 10 states. On the other hand, the net income during the period has decreased to -$0.8 million from $7.2 million in the same period the previous year, owing to a significant decline in both income from operations margin and restaurant-level operating profit margin, and high food and labor costs. The new Adjusted EBITDA guidance range has declined from $124.0 million to $130.0 million in 2024 to $114.0 million to $119.0 million in 2025, indicating company growth complications.
Investor expectations for First Watch Restaurant Group, Inc. (NASDAQ:FWRG) seem to stand above average, as represented by the notable P/E ratio of 61.36. However, with a dramatic 52.97% rise in insider selling, it may be possible that the confidence from within the company’s leadership is fading.
1. Innoviva, Inc. (NASDAQ:INVA)
P/E Ratio: 89.58
Insider Transaction: -69.15%
California-based company, Innoviva, Inc. (NASDAQ:INVA) is a healthcare asset management firm with royalty interests in respiratory therapies. The company also has a growing portfolio of healthcare investments. Initially deriving its revenue from GlaxoSmithKline-partnered drugs like Trelegy and Anoro, the company is now diversified into hospital and infectious disease assets through strategic acquisitions. With market peers like Royalty Pharma and similar monetization entities increasing the competition levels, the company’s future performance is hanging on optimizing investment returns and capturing synergies across its expanding healthcare holdings.
Innoviva, Inc. (NASDAQ:INVA)’s core royalty platform showed continued strength in 2024, realizing $255.6 million in revenue for the full year. Additionally, Innoviva Specialty Therapeutics’s U.S. net product sales growth of 47% year-over-year translates positively among the investors in the market. The company has also secured U.S. rights to ZEVTERA® and plans to launch it in mid-2025. The integration is expected to strengthen the company’s therapeutics platform and raise the possibility of significant future revenue. Meanwhile, the gross royalty revenue from GSK decreased in Q4 2024 to $66 million, signaling caution. Investment value has also dropped, mainly in Armata Pharma, causing a loss of $123.4 million to the net income in 2024 and suggesting potential hurdles to profit-making in the future.
With a substantially high P/E ratio of 89.58, Innoviva, Inc. (NASDAQ:INVA) appears priced far beyond fundamental norms. Insider selling in the last six months has spiked by over 69.15%, reinforcing that insiders could not see any justification for such a high valuation.
Overall, Innoviva, Inc. (NASDAQ:INVA) ranks first among the 10 stocks with insanely high P/E ratios insiders are selling. While we acknowledge the potential of INVA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than INVA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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