Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 is one profitable company that balances growth and profitability and two that may face some trouble.
Two Stocks to Sell:
Carlisle (CSL)
Trailing 12-Month GAAP Operating Margin: 22%
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Why Does CSL Give Us Pause?
- 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
- Estimated sales growth of 5.1% for the next 12 months is soft and implies weaker demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.8% annually
Carlisle’s stock price of $368.79 implies a valuation ratio of 16.3x forward P/E. Read our free research report to see why you should think twice about including CSL in your portfolio.
GE HealthCare (GEHC)
Trailing 12-Month GAAP Operating Margin: 13.7%
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ: GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Does GEHC Fall Short?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Projected sales growth of 3.7% for the next 12 months suggests sluggish demand
- Performance over the past three years shows its incremental sales were less profitable as its earnings per share were flat
GE HealthCare is trading at $72.93 per share, or 15.2x forward P/E. To fully understand why you should be careful with GEHC, check out our full research report (it’s free).
One Stock to Buy:
MercadoLibre (MELI)
Trailing 12-Month GAAP Operating Margin: 12.8%
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Is MELI a Top Pick?
- Unique Active Buyers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 16.9% annually
- Robust free cash flow margin of 30.2% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
At $2,386 per share, MercadoLibre trades at 27.7x forward EV/EBITDA. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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).
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.
