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 is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Deckers (DECK)
Market Cap: $10.68 billion
Established in 1973, Deckers (NYSE: DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Why Do We Think DECK Will Underperform?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Subpar operating margin of 23.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 18.8% for the last two years
Deckers’s stock price of $78.54 implies a valuation ratio of 10.5x forward P/E. Read our free research report to see why you should think twice about including DECK in your portfolio.
Ingersoll Rand (IR)
Market Cap: $27.87 billion
Started with the invention of the steam drill, Ingersoll Rand (NYSE: IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.
Why Are We Hesitant About IR?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 3.2% annually
- Underwhelming 6.3% return on capital reflects management’s difficulties in finding profitable growth opportunities
Ingersoll Rand is trading at $71.83 per share, or 19.8x forward P/E. To fully understand why you should be careful with IR, check out our full research report (it’s free).
One Stock to Buy:
Datadog (DDOG)
Market Cap: $82.56 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Do We Love DDOG?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
At $230.61 per share, Datadog trades at 17.7x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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 Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
