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 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 three large-cap stocks whose momentum may slow and a few alternatives you should consider instead.
Teradyne (TER)
Market Cap: $57.08 billion
Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.
Why Is TER Not Exciting?
- Decent 5.3% annual revenue growth over the last five years beat most of its peers, showing customers find value in its products and services
- Estimated sales growth of 24.4% for the next 12 months implies demand will slow from its two-year trend
- 6.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Teradyne’s stock price of $363.26 implies a valuation ratio of 38.9x forward P/E. Read our free research report to see why you should think twice about including TER in your portfolio.
Cummins (CMI)
Market Cap: $87.39 billion
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.
Why Do We Think Twice About CMI?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Gross margin of 24.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 5.4% for the last five years
Cummins is trading at $637.50 per share, or 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than CMI.
Danaher (DHR)
Market Cap: $147.2 billion
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE:DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Why Are We Hesitant About DHR?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 7.8 percentage points
- Earnings per share fell by 1.6% annually over the last five years while its revenue was flat, showing each sale was less profitable
At $209.17 per share, Danaher trades at 23.1x forward P/E. Check out our free in-depth research report to learn more about why DHR doesn’t pass our bar.
Stocks We Like More
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.