While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.

Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here are three S&P 500 stocks that don’t make the cut and some better choices instead.

Teradyne (TER)

Market Cap: $17.76 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 Are We Wary of TER?

1. Flat sales over the last five years suggest it must find different ways to grow during this cycle
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 14.4 percentage points
3. Sales over the last five years were less profitable as its earnings per share fell by 4.4% annually while its revenue was flat

At $111.02 per share, Teradyne trades at 28.2x forward P/E. Check out our free in-depth research report to learn more about why TER doesn’t pass our bar.

Lamb Weston (LW)

Market Cap: $7.38 billion

Best known for its Grown in Idaho brand, Lamb Weston (NYSE: LW) produces and distributes potato products such as frozen french fries and mashed potatoes.

Why Do We Think Twice About LW?

1. Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
2. Efficiency has decreased over the last year as its operating margin fell by 6.2 percentage points
3. Poor free cash flow margin of 0.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Lamb Weston is trading at $52.97 per share, or 15.4x forward P/E. If you’re considering LW for your portfolio, see our FREE research report to learn more.

MetLife (MET)

Market Cap: $50.91 billion

Founded in 1863 by a group of New York businessmen during the Civil War era, MetLife (NYSE: MET) is a global financial services company that provides insurance, annuities, employee benefits, and asset management services to individuals and businesses worldwide.

Why Do We Think MET Will Underperform?

1. Insurance policy sales contracted this cycle as net premiums earned decreased by 1.9% annually over the last two years
2. Earnings per share lagged its peers over the last two years as they only grew by 13.6% annually
3. Annual book value per share declines of 13% for the past five years show its capital management struggled during this cycle

MetLife’s stock price of $76.50 implies a valuation ratio of 2x forward P/B. Read our free research report to see why you should think twice about including MET in your portfolio.

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 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-micro-cap company Tecnoglass (+1,754% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.