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:
PACCAR (PCAR)
Market Cap: $65.59 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 Does PCAR Worry Us?
- 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
- High input costs result in an inferior gross margin of 16.5% that must be offset through higher volumes
- Earnings per share have contracted by 27.8% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
PACCAR’s stock price of $124.85 implies a valuation ratio of 23.3x forward P/E. To fully understand why you should be careful with PCAR, check out our full research report (it’s free).
CoStar (CSGP)
Market Cap: $19.08 billion
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ:CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Are We Hesitant About CSGP?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 3.8% annually
- Free cash flow margin shrank by 17.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
CoStar is trading at $44.95 per share, or 40.9x forward P/E. Dive into our free research report to see why there are better opportunities than CSGP.
One Stock to Watch:
Western Digital (WDC)
Market Cap: $96.32 billion
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Are We Fans of WDC?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 31.7%
- Efficiency rose over the last five years as its Operating margin increased by 16.1 percentage points
- Free cash flow margin grew by 14.7 percentage points over the last five years, giving the company more chips to play with
At $286.58 per share, Western Digital trades at 24.2x forward P/E. 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.