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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here is one S&P 500 stock that could deliver good returns and two best left off your watchlist.
Two Stocks to Sell:
Adobe (ADBE)
Market Cap: $148.3 billion
Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.
Why Does ADBE Worry Us?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 11.6% underwhelmed
- Estimated sales growth of 9% for the next 12 months implies demand will slow from its two-year trend
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Adobe is trading at $353 per share, or 5.9x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ADBE.
Hilton (HLT)
Market Cap: $61.45 billion
Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.
Why Is HLT Not Exciting?
- Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
- Projected sales growth of 7.2% for the next 12 months suggests sluggish demand
- Projected 2.4 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
At $261.27 per share, Hilton trades at 31.3x forward P/E. Check out our free in-depth research report to learn more about why HLT doesn’t pass our bar.
One Stock to Buy:
DoorDash (DASH)
Market Cap: $112 billion
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE: DASH) operates an on-demand food delivery platform.
Why Do We Love DASH?
- Orders are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Additional sales over the last three years increased its profitability as the 111% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 11.9 percentage points over the last few years, giving the company more chips to play with
DoorDash’s stock price of $261.75 implies a valuation ratio of 36.5x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 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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