While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that balance growth and profitability and one that may face some trouble.
One Stock to Sell:
Rapid7 (RPD)
Trailing 12-Month GAAP Operating Margin: 2.7%
With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ: RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.
Why Should You Dump RPD?
- Customers were hesitant to make long-term commitments to its software as its 4.2% average ARR growth over the last year was sluggish
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Operating margin expanded by 1.7 percentage points over the last year as it scaled and became more efficient
Rapid7 is trading at $18.83 per share, or 1.4x forward price-to-sales. To fully understand why you should be careful with RPD, check out our full research report (it’s free for active Edge members).
Two Stocks to Watch:
Coca-Cola (KO)
Trailing 12-Month GAAP Operating Margin: 30.6%
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Does KO Stand Out?
- Dominant market position is represented by its $47.79 billion in revenue, which gives it negotiating power with suppliers and retailers
- Unique products and pricing power are reflected in its best-in-class gross margin of 61.1%
- Healthy operating margin of 25.7% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
Coca-Cola’s stock price of $70.13 implies a valuation ratio of 22x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Blackstone (BX)
Trailing 12-Month GAAP Operating Margin: 58.4%
With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE: BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.
Why Will BX Beat the Market?
- Annual revenue growth of 19.2% over the past five years was outstanding, reflecting market share gains this cycle
- Fee-related earnings improved by 22.7% annually over the last five years as it eliminated redundant costs
- Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 19.7% annually
At $151.30 per share, Blackstone trades at 24.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-small-cap company Exlservice (+354% 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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