3 S&P 500 Stocks That Fall Short
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.
Tapestry (TPR)
Market Cap: $24.35 billion
Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Should You Sell TPR?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin is forecasted to shrink by 3.3 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Tapestry’s stock price of $122.76 implies a valuation ratio of 15.3x forward P/E. Check out our free in-depth research report to learn more about why TPR doesn’t pass our bar.
Wynn Resorts (WYNN)
Market Cap: $9.29 billion
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ:WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Why Do We Think WYNN Will Underperform?
- Sales trends were unexciting over the last two years as its 2.1% annual growth was below the typical consumer discretionary company
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- High net-debt-to-EBITDA ratio of 5× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $90.54 per share, Wynn Resorts trades at 20.6x forward P/E. If you’re considering WYNN for your portfolio, see our FREE research report to learn more.
U.S. Bancorp (USB)
Market Cap: $98.73 billion
With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE:USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.
Why Does USB Fall Short?
- Annual net interest income growth of 6.4% over the last five years lagged behind its banking peers as its large revenue base made it difficult to generate incremental demand
- Weak unit economics are reflected in its net interest margin of 2.7%, one of the worst among bank companies
- Performance over the past five years shows its incremental sales were less profitable, as its 1.4% annual earnings per share growth trailed its revenue gains
U.S. Bancorp is trading at $63.50 per share, or 1.6x forward P/B. Read our free research report to see why you should think twice about including USB in your portfolio.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.