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.
Investing in Nasdaq 100 stocks isn’t just about picking big names - it’s about finding the right ones, and that’s where StockStory comes in. Keeping that in mind, here are two Nasdaq 100 stocks driving the future of tech and one that may face some trouble.
One stock to sell:
Teradyne (TER)
Market cap: $42.05 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?
- Estimated sales growth of 20.3% for the next 12 months implies demand will slow from its two-year trend
- Can finance growth initiatives independently due to its satisfactory free cash flow margin of 18.9% for the past two years, and its recently improved profitability means it has more resources to invest or distribute
Teradyne is trading at $266.76 per share, or 24.7x forward P/E. If you’re considering TER for your portfolio, see our FREE research report to learn more.
Two stocks to buy:
Micron (MU)
Market cap: $967.5 billion
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NASDAQ: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Why Will MU Outperform?
- Annual revenue growth of 130% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 65.6% over the last five years outstripped its revenue performance
- MU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
Micron’s stock price of $849.32 implies a valuation ratio of 4.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Cintas (CTAS)
Market cap: $88.84 billion
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Should You Buy CTAS?
- Annual revenue growth of 9.7% over the last five years was superb and indicates its market share increased during this cycle
- Robust free cash flow margin of 16.6% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
At $222.25 per share, Cintas trades at 39.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
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