A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.

Two Stocks to Sell:

Dell (DELL)

Trailing 12-Month GAAP Operating Margin: 6.7%

Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE: DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.

Why Are We Wary of DELL?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Customers were hesitant to make long-term commitments to its offerings as its 5% average ARR growth over the past two years was sluggish
3. Free cash flow margin shrank by 9.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Dell’s stock price of $125.50 implies a valuation ratio of 13x forward P/E. Read our free research report to see why you should think twice about including DELL in your portfolio.

CONMED (CNMD)

Trailing 12-Month GAAP Operating Margin: 13.8%

With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.

Why Do We Think Twice About CNMD?

1. Annual revenue growth of 6.7% over the last five years was below our standards for the healthcare sector
2. Subscale operations are evident in its revenue base of $1.32 billion, meaning it has fewer distribution channels than its larger rivals
3. ROIC of 5% reflects management’s challenges in identifying attractive investment opportunities

CONMED is trading at $52.34 per share, or 11.7x forward P/E. Check out our free in-depth research report to learn more about why CNMD doesn’t pass our bar.

One Stock to Watch:

CAVA (CAVA)

Trailing 12-Month GAAP Operating Margin: 4.8%

Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.

Why Does CAVA Catch Our Eye?

1. Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
2. Average same-store sales growth of 13.8% over the past two years indicates its restaurants are resonating with diners
3. Free cash flow margin jumped by 7.9 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $78.00 per share, CAVA trades at 127.4x 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

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-micro-cap company Tecnoglass (+1,754% 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