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. 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:

Altice (ATUS)

Trailing 12-Month GAAP Operating Margin: 16.4%

Based in Long Island City, Altice USA (NYSE: ATUS) is a telecommunications company offering cable, internet, telephone, and television services across the United States.

Why Are We Out on ATUS?

1. Demand for its offerings was relatively low as its number of broadband subscribers has underwhelmed
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 31.1% annually, worse than its revenue
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $2.38 per share, Altice trades at 0.3x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including ATUS in your portfolio.

Steven Madden (SHOO)

Trailing 12-Month GAAP Operating Margin: 5.8%

As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.

Why Are We Cautious About SHOO?

1. Lackluster 9.4% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 7.9% for the last two years
3. Waning returns on capital imply its previous profit engines are losing steam

Steven Madden is trading at $29.49 per share, or 17.8x forward P/E. Check out our free in-depth research report to learn more about why SHOO doesn’t pass our bar.

One Stock to Buy:

Comfort Systems (FIX)

Trailing 12-Month GAAP Operating Margin: 12.2%

Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.

Why Should You Buy FIX?

1. Backlog has averaged 29.5% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
2. Share repurchases over the last two years enabled its annual earnings per share growth of 69.7% to outpace its revenue gains
3. Rising returns on capital show management is finding more attractive investment opportunities

Comfort Systems’s stock price of $709.95 implies a valuation ratio of 35.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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

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