While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are three S&P 500 stocks to steer clear of and a few alternatives to consider.
Salesforce (CRM)
Market Cap: $230.9 billion
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Are We Wary of CRM?
- Sizable revenue base leads to growth challenges as its 10.4% annual revenue increases over the last three years fell short of other software companies
- Customers were hesitant to make long-term commitments to its software as its 9% average ARR growth over the last year was sluggish
- Estimated sales growth of 8.9% for the next 12 months implies demand will slow from its three-year trend
At $242.50 per share, Salesforce trades at 5.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CRM.
Enphase (ENPH)
Market Cap: $4.97 billion
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.
Why Does ENPH Fall Short?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Efficiency has decreased over the last five years as its operating margin fell by 12 percentage points
- Earnings per share have contracted by 27.3% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Enphase is trading at $37.88 per share, or 15.3x forward P/E. If you’re considering ENPH for your portfolio, see our FREE research report to learn more.
Aflac (AFL)
Market Cap: $57.98 billion
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Is AFL Risky?
- Insurance offerings face significant market challenges this cycle as net premiums earned contracted by 7.8% annually over the last four years
- Pre-tax profits fell over the last two years as its sales dropped and it struggled to adjust its fixed costs
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 13% annually
Aflac’s stock price of $108 implies a valuation ratio of 2.2x forward P/B. Check out our free in-depth research report to learn more about why AFL doesn’t pass our bar.
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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 Exlservice (+354% 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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