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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are three S&P 500 stocks that don’t make the cut and some better choices instead.
PayPal (PYPL)
Market cap: $50.01 billion
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Why Does PYPL Worry Us?
- 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 4.4% for the last two years
- Incremental sales over the last five years were less profitable as its 3.4% annual earnings per share growth lagged its revenue gains
At $60.13 per share, PayPal trades at 9.9x forward P/E. To fully understand why you should be careful with PYPL, check out our full research report (it’s free).
Gilead Sciences (GILD)
Market cap: $216.4 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Cautious About GILD?
- The company has faced growth challenges as its 2.4% annual revenue increases over the last five years fell short of other healthcare companies
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 30.2 percentage points
- Earnings per share have dipped by 15.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Gilead Sciences’s stock price of $175.29 implies a valuation ratio of 20.4x forward P/E. Read our free research report to see why you should think twice about including GILD in your portfolio.
Bio-Techne (TECH)
Market cap: $11.41 billion
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ: TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Why Do We Steer Clear of TECH?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Modest revenue base of $1.22 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Bio-Techne is trading at $72.73 per share, or 35.3x forward P/E. If you’re considering TECH for your portfolio, see our FREE research report to learn more.
Stocks we like more
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
