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. Keeping that in mind, here are two S&P 500 stocks positioned to outperform and one that could be in trouble.
One Stock to Sell:
Thermo Fisher (TMO)
Market Cap: $217.9 billion
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE: TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Why Do We Think Twice About TMO?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 9.2 percentage points
Thermo Fisher’s stock price of $578.20 implies a valuation ratio of 23.9x forward P/E. Check out our free in-depth research report to learn more about why TMO doesn’t pass our bar.
Two Stocks to Watch:
Coinbase (COIN)
Market Cap: $65.34 billion
Widely regarded as the face of crypto, Coinbase (NASDAQ: COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Is COIN on Our Radar?
- Monthly Transacting Users have grown by 11.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 55% annually
- Platform is difficult to replicate at scale and leads to a best-in-class gross margin of 85.9%
Coinbase is trading at $241.41 per share, or 19x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Lennox (LII)
Market Cap: $17.35 billion
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Could LII Be a Winner?
- Excellent operating margin of 17.2% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last five years
- Share repurchases over the last two years enabled its annual earnings per share growth of 18.3% to outpace its revenue gains
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $494.51 per share, Lennox trades at 21x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even 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 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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.
