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 are three S&P 500 stocks to steer clear of and a few alternatives to consider.
Expedia (EXPE)
Market Cap: $34.94 billion
Originally founded as a part of Microsoft, Expedia (NASDAQ: EXPE) is one of the world’s leading online travel agencies.
Why Are We Hesitant About EXPE?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 8.3% over the last three years was below our standards for the consumer internet sector
- Decision to emphasize platform growth over monetization has contributed to 1.7% annual declines in its average revenue per booking
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $286.20 per share, Expedia trades at 10.2x forward EV/EBITDA. Read our free research report to see why you should think twice about including EXPE in your portfolio.
United Rentals (URI)
Market Cap: $58.62 billion
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Do We Think Twice About URI?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.1% annually
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.6 percentage points
United Rentals’s stock price of $921.24 implies a valuation ratio of 20.2x forward P/E. To fully understand why you should be careful with URI, check out our full research report (it’s free).
IBM (IBM)
Market Cap: $285.7 billion
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Is IBM Not Exciting?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.3% for the last five years
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 4.2% annually
IBM is trading at $305.66 per share, or 25.3x forward P/E. Read our free research report to see why you should think twice about including IBM in your portfolio.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
