While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

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:

BlackLine (BL)

Trailing 12-Month GAAP Operating Margin: 3.8%

Born from the vision to eliminate tedious manual spreadsheet work for accountants, BlackLine (NASDAQ: BL) provides cloud-based software that automates and streamlines financial close, intercompany accounting, and invoice-to-cash processes for accounting departments.

Why Is BL Not Exciting?

1. Revenue increased by 12.5% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
2. Offerings struggled to generate meaningful interest as its average billings growth of 7.2% over the last year did not impress
3. Estimated sales growth of 8.2% for the next 12 months implies demand will slow from its three-year trend

BlackLine’s stock price of $54.04 implies a valuation ratio of 4.8x forward price-to-sales. To fully understand why you should be careful with BL, check out our full research report (it’s free).

IDEX (IEX)

Trailing 12-Month GAAP Operating Margin: 19.9%

Founded in 1988, IDEX (NYSE: IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.

Why Do We Steer Clear of IEX?

1. 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
2. Earnings per share fell by 4% annually over the last two years while its revenue was flat, showing each sale was less profitable
3. Diminishing returns on capital suggest its earlier profit pools are drying up

IDEX is trading at $165.22 per share, or 19.3x forward P/E. If you’re considering IEX for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Itron (ITRI)

Trailing 12-Month GAAP Operating Margin: 11.8%

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Why Does ITRI Stand Out?

1. Efficiency rose over the last five years as its Operating margin increased by 10.3 percentage points
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 74.4% over the last two years outstripped its revenue performance
3. Returns on capital are increasing as management’s prior bets are starting to bear fruit

At $123.48 per share, Itron trades at 22.6x 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

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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-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

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