1 Nasdaq 100 Stock to Research Further and 2 Facing Headwinds

While the Nasdaq 100 (^NDX) is filled with cutting-edge technology and consumer companies, not all are on solid footing. Some are dealing with declining demand, high costs, or regulatory pressures that could limit future upside.

Even among high-growth companies, some are struggling, which is why we built StockStory - to help you separate winners from losers. Keeping that in mind, here is one Nasdaq 100 stock that has huge potential and two that may face some trouble.

Two Stocks to Sell:

Marriott (MAR)

Market Cap: $92.2 billion

Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.

Why Are We Out on MAR?

1. Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
2. Subpar operating margin of 15.4% constrains its ability to invest in process improvements or effectively respond to new competitive threats
3. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 5.4 percentage points

At $349.94 per share, Marriott trades at 30.3x forward P/E. Read our free research report to see why you should think twice about including MAR in your portfolio.

CSX (CSX)

Market Cap: $78.68 billion

Established as part of the Chessie System and Seaboard Coast Line Industries merger, CSX (NASDAQ:CSX) is a transportation company specializing in freight rail services.

Why Do We Avoid CSX?

1. Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. 18 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

CSX is trading at $42.29 per share, or 22.6x forward P/E. Check out our free in-depth research report to learn more about why CSX doesn’t pass our bar.

One Stock to Watch:

PayPal (PYPL)

Market Cap: $38.35 billion

Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ:PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.

Why Do We Like PYPL?

1. ROE punches in at 19.9%, illustrating management’s expertise in identifying profitable investments

PayPal’s stock price of $41.53 implies a valuation ratio of 7.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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