The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. Keeping that in mind, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.
One Stock to Sell:
First Solar (FSLR)
Market Cap: $19.84 billion
Headquartered in Arizona, First Solar (NASDAQ: FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
Why Do We Think Twice About FSLR?
- 6.8% annual revenue growth over the last five years was slower than its industrials peers
- Free cash flow margin dropped by 18.9 percentage points over the last five years, implying the company increased its investment activities to fend off competitors
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
First Solar is trading at $185.08 per share, or 9.4x forward P/E. If you’re considering FSLR for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Netflix (NFLX)
Market Cap: $500.8 billion
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Why Is NFLX a Good Business?
- Global Streaming Paid Memberships are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 27.8% exceeded its revenue gains over the last three years
- Free cash flow margin expanded by 19.9 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Netflix’s stock price of $1,176 implies a valuation ratio of 34x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
McDonald's (MCD)
Market Cap: $220 billion
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE: MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
Why Could MCD Be a Winner?
- Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
- Attractive franchise model leads to wonderful unit economics and a best-in-class gross margin of 57%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $308 per share, McDonald's trades at 24.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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