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.
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 balance growth and profitability and one that may struggle to keep up.
One Stock to Sell:
Sanmina (SANM)
Trailing 12-Month GAAP Operating Margin: 4.7%
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Do We Think SANM Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6% annually over the last two years
- Gross margin of 8.2% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
Sanmina is trading at $121.46 per share, or 17.3x forward P/E. Check out our free in-depth research report to learn more about why SANM doesn’t pass our bar.
Two Stocks to Watch:
Veeva Systems (VEEV)
Trailing 12-Month GAAP Operating Margin: 27%
Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE: VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry.
Why Does VEEV Catch Our Eye?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 15.5% over the last year
- Highly efficient business model is illustrated by its impressive 27% operating margin, and its operating leverage amplified its profits over the last year
- Robust free cash flow margin of 41.5% gives it many options for capital deployment
Veeva Systems’s stock price of $282.16 implies a valuation ratio of 14.6x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Vita Coco (COCO)
Trailing 12-Month GAAP Operating Margin: 12.4%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.
Why Is COCO Interesting?
- Products are reaching more households as its unit sales averaged 7.8% growth over the past two years
- Earnings per share grew by 195% annually over the last three years and trumped its peers
- Industry-leading 47.7% return on capital demonstrates management’s skill in finding high-return investments, and its returns are climbing as it finds even more attractive growth opportunities
At $32.53 per share, Vita Coco trades at 25.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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 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.
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