Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. That said, here is one large-cap stock whose competitive advantages create flywheel effects and two whose momentum may slow.
Two Large-Cap Stocks to Sell:
Estée Lauder (EL)
Market Cap: $34.17 billion
Named after its founder, who was an entrepreneurial woman from New York with a passion for skincare, Estée Lauder (NYSE:EL) is a one-stop beauty shop with products in skincare, fragrance, makeup, sun protection, and men’s grooming.
Why Does EL Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Operating margin of 0% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Issuance of new shares over the last three years caused its earnings per share to fall by 10.1% annually, even worse than its revenue declines
Estée Lauder is trading at $94.48 per share, or 28.1x forward P/E. Check out our free in-depth research report to learn more about why EL doesn’t pass our bar.
Marriott (MAR)
Market Cap: $92.96 billion
Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.
Why Should You Sell MAR?
- Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1 percentage points over the next year
- Stagnant returns on capital show management has failed to improve the company’s business quality
Marriott’s stock price of $356.58 implies a valuation ratio of 29.2x forward P/E. Dive into our free research report to see why there are better opportunities than MAR.
One Large-Cap Stock to Watch:
Cadence Design Systems (CDNS)
Market Cap: $98.07 billion
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Are We Positive on CDNS?
- Billings growth has averaged 17.9% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Prominent and differentiated software results in a best-in-class gross margin of 86.8%
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $356.12 per share, Cadence Design Systems trades at 14.8x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.