Large-cap stocks usually command their industries because they have the scale to drive market trends. The flip side though is that their sheer size can limit growth as expanding further becomes an increasingly challenging task.
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 are two large-cap stocks with attractive long-term potential and one whose existing offerings may be tapped out.
One Large-Cap Stock to Sell:
Take-Two (TTWO)
Market Cap: $36.75 billion
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ:TTWO) is one of the world’s largest video game publishers.
Why Are We Hesitant About TTWO?
- Efficiency fell over the last four years as its EBITDA margin declined by 13.1 percentage points because it pursued growth instead of profits
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 88.8% annually
- Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
Take-Two’s stock price of $208.21 implies a valuation ratio of 18.7x forward EV-to-EBITDA. If you’re considering TTWO for your portfolio, see our FREE research report to learn more.
Two Large-Cap Stocks to Watch:
Cloudflare (NET)
Market Cap: $48.53 billion
Founded by two grad students of Harvard Business School, Cloudflare (NYSE:NET) is a software-as-a-service platform that helps improve the security, reliability, and loading times of internet applications.
Why Is NET a Good Business?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 25.8% over the last year
- Notable projected revenue growth of 25.4% for the next 12 months hints at market share gains
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Cloudflare is trading at $140.88 per share, or 23.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Cigna (CI)
Market Cap: $84.26 billion
Serving both corporate clients and individual customers, Cigna (NYSE:CI) offers health insurance and pharmacy benefit management services that cover medical, dental, behavioral health, and vision needs.
Why Are We Fans of CI?
- Annual revenue growth of 17% over the past two years has been outstanding, reflecting market share gains this cycle
- Massive revenue base of $247.1 billion gives it meaningful leverage when negotiating reimbursement rates
- Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 9.9% annually
At $302.92 per share, Cigna trades at 9.6x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.