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?

1. 6.8% annual revenue growth over the last five years was slower than its industrials peers
2. 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
3. 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?

1. 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
2. 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
3. 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?

1. Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
2. Attractive franchise model leads to wonderful unit economics and a best-in-class gross margin of 57%
3. 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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