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 that may face near-term headwinds and some other investments you should consider instead.
Expedia (EXPE)
Market Cap: $38.28 billion
Originally founded as a part of Microsoft, Expedia (NASDAQ: EXPE) is one of the world’s leading online travel agencies.
Why Are We Hesitant About EXPE?
- Decision to emphasize platform growth over monetization has contributed to sluggish trends in its average revenue per booking
- Estimated sales growth of 6.3% for the next 12 months implies demand will slow from its three-year trend
- Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
At $321.23 per share, Expedia trades at 9.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than EXPE.
PACCAR (PCAR)
Market Cap: $66.61 billion
Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Do We Think Twice About PCAR?
- Sales tumbled by 11.2% annually over the last two years, showing market trends are working against it during this cycle
- Earnings per share have contracted by 29% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Diminishing returns on capital suggest its earlier profit pools are drying up
PACCAR is trading at $126.52 per share, or 19.6x forward P/E. To fully understand why you should be careful with PCAR, check out our full research report (it’s free).
United Parcel Service (UPS)
Market Cap: $89.91 billion
Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.
Why Should You Sell UPS?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 8.4% annually
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
United Parcel Service’s stock price of $105.78 implies a valuation ratio of 13.6x forward P/E. Check out our free in-depth research report to learn more about why UPS doesn’t pass our bar.
Stocks We Like 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
