Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble.

Two Stocks to Sell:

FedEx (FDX)

Trailing 12-Month GAAP Operating Margin: 5.9%

Sporting one of the largest air cargo fleets in the world, FedEx (NYSE: FDX) is a global provider of parcel and cargo delivery services.

Why Do We Avoid FDX?

1. Annual sales declines of 1.2% for the past two years show its products and services struggled to connect with the market during this cycle
2. Projected sales growth of 1.5% for the next 12 months suggests sluggish demand
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

FedEx’s stock price of $234.56 implies a valuation ratio of 12x forward P/E. To fully understand why you should be careful with FDX, check out our full research report (it’s free).

U.S. Physical Therapy (USPH)

Trailing 12-Month GAAP Operating Margin: 9.8%

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

Why Do We Think Twice About USPH?

1. Revenue base of $699.5 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. 14.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

U.S. Physical Therapy is trading at $73.77 per share, or 27.3x forward P/E. Check out our free in-depth research report to learn more about why USPH doesn’t pass our bar.

One Stock to Buy:

FTAI Aviation (FTAI)

Trailing 12-Month GAAP Operating Margin: 14.5%

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.

Why Will FTAI Outperform?

1. Market share has increased this cycle as its 44.9% annual revenue growth over the last two years was exceptional
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 73.8% outpaced its revenue gains
3. Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency

At $114.65 per share, FTAI Aviation trades at 19.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 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-micro-cap company Kadant (+351% 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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