Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. Keeping that in mind, here is one large-cap stock that still has big upside potential and two whose momentum may slow.
Two Large-Cap Stocks to Sell:
Disney (DIS)
Market Cap: $205.7 billion
Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Do We Avoid DIS?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 4.2% over the last five years was below our standards for the consumer discretionary sector
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.6 percentage points
Disney’s stock price of $113.95 implies a valuation ratio of 20.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why DIS doesn’t pass our bar.
United Airlines (UAL)
Market Cap: $30.71 billion
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Does UAL Give Us Pause?
- Demand for its offerings was relatively low as its number of revenue passenger miles has underwhelmed
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.6% annually
- Low returns on capital reflect management’s struggle to allocate funds effectively
United Airlines is trading at $94.30 per share, or 7.3x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than UAL.
One Large-Cap Stock to Buy:
DoorDash (DASH)
Market Cap: $83.36 billion
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE: DASH) operates an on-demand food delivery platform.
Why Will DASH Outperform?
- Has the opportunity to boost monetization through new features and premium offerings as its orders have grown by 22.1% annually over the last two years
- Excellent EBITDA margin of 16% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last four years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 124% over the last three years outstripped its revenue performance
At $199.37 per share, DoorDash trades at 32x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
