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".

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 struggle to keep up.

Two Stocks to Sell:

Jazz Pharmaceuticals (JAZZ)

Trailing 12-Month GAAP Operating Margin: 14.6%

Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.

Why Does JAZZ Give Us Pause?

1. Annual revenue growth of 4.3% over the last two years was below our standards for the healthcare sector
2. Efficiency has decreased over the last five years as its adjusted operating margin fell by 6.7 percentage points
3. ROIC of 5.3% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $111 per share, Jazz Pharmaceuticals trades at 4.8x forward P/E. To fully understand why you should be careful with JAZZ, check out our full research report (it’s free).

IAC (IAC)

Trailing 12-Month GAAP Operating Margin: 2.7%

Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ: IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.

Why Do We Steer Clear of IAC?

1. Sales tumbled by 1.3% annually over the last five years, showing market trends are working against its favor during this cycle
2. Falling earnings per share over the last four years has some investors worried as stock prices ultimately follow EPS over the long term
3. Push for growth has led to negative returns on capital, signaling value destruction

IAC’s stock price of $41.90 implies a valuation ratio of 33.6x forward P/E. Dive into our free research report to see why there are better opportunities than IAC.

One Stock to Watch:

Globus Medical (GMED)

Trailing 12-Month GAAP Operating Margin: 10.2%

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Why Could GMED Be a Winner?

1. Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
2. Notable projected revenue growth of 18.2% for the next 12 months hints at market share gains
3. Earnings per share grew by 13.8% annually over the last five years, massively outpacing its peers

Globus Medical is trading at $57.75 per share, or 16.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 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 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.