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. That said, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
Paramount (PSKY)
Market Cap: $10.97 billion
Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ: PSKY) is a major media conglomerate offering television, film production, and digital content across various global platforms.
Why Do We Steer Clear of PSKY?
- 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 1.8% for the last five years
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.1 percentage points over the next year
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Paramount’s stock price of $9.81 implies a valuation ratio of 5.8x forward P/E. If you’re considering PSKY for your portfolio, see our FREE research report to learn more.
IQVIA (IQV)
Market Cap: $43.8 billion
Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA (NYSE: IQV) provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.
Why Are We Wary of IQV?
- 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 5.6% for the last five years
- Costs have risen faster than its revenue over the last two years, causing its adjusted operating margin to decline by 1.5 percentage points
- Free cash flow margin was stuck in limbo over the last five years
IQVIA is trading at $261.71 per share, or 18.9x forward P/E. Check out our free in-depth research report to learn more about why IQV doesn’t pass our bar.
One Stock to Watch:
Copart (CPRT)
Market Cap: $25.61 billion
Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Why Are We Positive on CPRT?
- Annual revenue growth of 11.6% over the last five years was superb and indicates its market share increased during this cycle
- Strong free cash flow margin of 24.6% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
- ROIC punches in at 31.3%, illustrating management’s expertise in identifying profitable investments
At $27.71 per share, Copart trades at 16.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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.
