Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.

One Stock to Sell:

AMETEK (AME)

Trailing 12-Month GAAP Operating Margin: 26.2%

Started from its humble beginnings in motor repair, AMETEK (NYSE: AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.

Why Do We Think Twice About AME?

1. Sales trends were unexciting over the last two years as its 4.3% annual growth was below the typical industrials company
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth

At $187.44 per share, AMETEK trades at 25.7x forward P/E. If you’re considering AME for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Upwork (UPWK)

Trailing 12-Month GAAP Operating Margin: 13.7%

Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.

Why Could UPWK Be a Winner?

1. Customers are spending more money on its platform as its average revenue per customer has increased by 8.9% annually over the last two years
2. Additional sales over the last three years increased its profitability as the 166% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin increased by 31.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Upwork’s stock price of $17.71 implies a valuation ratio of 12.2x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.

Core & Main (CNM)

Trailing 12-Month GAAP Operating Margin: 9.4%

Formerly a division of industrial distributor HD Supply, Core & Main (NYSE: CNM) is a provider of water, wastewater, and fire protection products and services.

Why Should You Buy CNM?

1. Annual revenue growth of 17.3% over the past five years was outstanding, reflecting market share gains this cycle
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 20.5% exceeded its revenue gains over the last two years
3. Free cash flow margin expanded by 7.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

Core & Main is trading at $52.60 per share, or 20.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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Take advantage of the rebound by checking out our 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).

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