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".
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. 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:
Lazard (LAZ)
Trailing 12-Month GAAP Operating Margin: 14.5%
Tracing its roots back to 1848 when it began as a dry goods merchant in New Orleans, Lazard (NYSE: LAZ) is a global financial advisory and asset management firm that provides strategic advice to corporations, governments, institutions, and wealthy individuals.
Why Are We Hesitant About LAZ?
- Muted 3.6% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings per share fell by 2.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $49.20 per share, Lazard trades at 16x forward P/E. Read our free research report to see why you should think twice about including LAZ in your portfolio.
Two Stocks to Watch:
Sprouts (SFM)
Trailing 12-Month GAAP Operating Margin: 7.6%
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ: SFM) is a grocery store chain emphasizing natural and organic products.
Why Are We Backing SFM?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 7.5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Projected revenue growth of 11.8% for the next 12 months is above its six-year trend, pointing to accelerating demand
Sprouts is trading at $107.17 per share, or 18.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
AbbVie (ABBV)
Trailing 12-Month GAAP Operating Margin: 18.8%
Born from a 2013 spinoff of Abbott Laboratories' pharmaceutical business, AbbVie (NYSE: ABBV) is a biopharmaceutical company that develops and markets medications for autoimmune diseases, cancer, neurological disorders, and other complex health conditions.
Why Could ABBV Be a Winner?
- Dominant market position is represented by its $58.33 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- ABBV is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- ROIC punches in at 17.9%, illustrating management’s expertise in identifying profitable investments
AbbVie’s stock price of $230.04 implies a valuation ratio of 19.6x 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.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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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