Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Dropbox (DBX)
Trailing 12-Month GAAP Operating Margin: 20.7%
Founded by the long-serving CEO Drew Houston and Arash Ferdowsi in 2007, Dropbox (NASDAQ: DBX) provides a file hosting cloud platform that helps organizations collaborate and share documents.
Why Are We Hesitant About DBX?
- Customers had second thoughts about committing to its platform over the last year as its billings plateaued
- Sales are projected to tank by 2.7% over the next 12 months as demand evaporates
- Efficiency has decreased over the last year as its operating margin fell by 3 percentage points
At $28.34 per share, Dropbox trades at 3.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DBX.
Park-Ohio (PKOH)
Trailing 12-Month GAAP Operating Margin: 5.5%
Based in Cleveland, Park-Ohio (NASDAQ: PKOH) provides supply chain management services, capital equipment, and manufactured components.
Why Do We Steer Clear of PKOH?
- Sales stagnated over the last five years and signal the need for new growth strategies
- High input costs result in an inferior gross margin of 15.1% that must be offset through higher volumes
- Free cash flow margin dropped by 5.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Park-Ohio is trading at $18 per share, or 5.5x forward P/E. Check out our free in-depth research report to learn more about why PKOH doesn’t pass our bar.
One Stock to Buy:
DoorDash (DASH)
Trailing 12-Month GAAP Operating Margin: 1.6%
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE: DASH) operates an on-demand food delivery platform.
Why Is DASH a Top Pick?
- Orders are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Additional sales over the last three years increased its profitability as the 105% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 11.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
DoorDash’s stock price of $215.40 implies a valuation ratio of 32.5x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 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).
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