The Nasdaq 100 (^NDX) is home to some of the biggest success stories in tech and growth investing. However, certain stocks in the index face challenges like profitability concerns, rising costs, or shifts in market trends.
Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. That said, here is one Nasdaq 100 stock that could lead the market and two that may struggle.
Two Stocks to Sell:
Honeywell (HON)
Market Cap: $137.6 billion
Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.
Why Are We Wary of HON?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share lagged its peers over the last five years as they only grew by 3.5% annually
- 3.2 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
Honeywell is trading at $214.18 per share, or 20.1x forward P/E. To fully understand why you should be careful with HON, check out our full research report (it’s free).
3M (MMM)
Market Cap: $76.46 billion
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Is MMM Risky?
- 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
- Earnings per share have dipped by 3.4% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3M’s stock price of $141.81 implies a valuation ratio of 18.2x forward P/E. If you’re considering MMM for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Coca-Cola (KO)
Market Cap: $308.4 billion
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Is KO on Our Radar?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 11.1% over the past two years
- Dominant market position is represented by its $46.8 billion in revenue, which gives it negotiating power with suppliers and retailers
- Products command premium prices and lead to a best-in-class gross margin of 60.5%
At $71.70 per share, Coca-Cola trades at 23.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum 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.
