Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Avantor (AVTR)
Trailing 12-Month GAAP Operating Margin: 16.2%
With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE: AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.
Why Is AVTR Not Exciting?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Sales are projected to be flat over the next 12 months and imply weak demand
- Overall productivity fell over the last two years as its plummeting sales were accompanied by a decline in its adjusted operating margin
Avantor’s stock price of $13.46 implies a valuation ratio of 12.3x forward P/E. If you’re considering AVTR for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Salesforce (CRM)
Trailing 12-Month GAAP Operating Margin: 19.3%
Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE: CRM) is a software-as-a-service platform that helps companies access, manage, and share sales information such as leads.
Why Are We Fans of CRM?
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Healthy operating margin of 19.3% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Salesforce is trading at $266.01 per share, or 6.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Carvana (CVNA)
Trailing 12-Month GAAP Operating Margin: 8.4%
Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Why Should CVNA Be on Your Watchlist?
- Retail Units Sold have increased by an average of 13.8% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 45% over the last three years outstripped its revenue performance
- Free cash flow margin increased by 30.2 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $317.39 per share, Carvana trades at 22.3x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. 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 Comfort Systems (+782% 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.
