The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
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 is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Tractor Supply (TSCO)
Market Cap: $17.63 billion
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ: TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Why Does TSCO Give Us Pause?
- Annual sales growth of 2.2% over the last three years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 3.5 percentage points
Tractor Supply is trading at $33.78 per share, or 16.8x forward P/E. Check out our free in-depth research report to learn more about why TSCO doesn’t pass our bar.
Align Technology (ALGN)
Market Cap: $10.87 billion
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ: ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Are We Cautious About ALGN?
- Sales trends were unexciting over the last two years as its 2.5% annual growth was below the typical healthcare company
- Earnings per share lagged its peers over the last five years as they only grew by 1.4% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
Align Technology’s stock price of $152.38 implies a valuation ratio of 12.7x forward P/E. Read our free research report to see why you should think twice about including ALGN in your portfolio.
One Stock to Watch:
Waters Corporation (WAT)
Market Cap: $40.28 billion
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE: WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Why Does WAT Stand Out?
- Projected revenue growth of 48.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Free cash flow margin of 14.9% is higher than many in the industry, giving it breathing room and optionality
- Industry-leading 27.1% return on capital demonstrates management’s skill in finding high-return investments
At $409.36 per share, Waters Corporation trades at 26.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
