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".
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:
Amentum (AMTM)
Trailing 12-Month GAAP Operating Margin: 2.9%
With operations spanning approximately 80 countries and a workforce of specialized engineers and technical experts, Amentum Holdings (NYSE: AMTM) provides advanced engineering and technology solutions to U.S. government agencies, allied governments, and commercial enterprises across defense, energy, and space sectors.
Why Is AMTM Not Exciting?
- Annual sales growth of 3.8% over the last two years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
- Poor free cash flow margin of 1.9% for the last four years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $24.78 per share, Amentum trades at 10.9x forward P/E. Check out our free in-depth research report to learn more about why AMTM doesn’t pass our bar.
CRA (CRAI)
Trailing 12-Month GAAP Operating Margin: 11.9%
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
Why Does CRAI Fall Short?
- Smaller revenue base of $712.9 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Free cash flow margin dropped by 7.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
CRA is trading at $194.34 per share, or 23.5x forward P/E. If you’re considering CRAI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Corpay (CPAY)
Trailing 12-Month GAAP Operating Margin: 44.7%
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Why Are We Fans of CPAY?
- Annual revenue growth of 10.2% over the last five years was above the sector average and underscores its products and services value to customers
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.6% exceeded its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Corpay’s stock price of $319.37 implies a valuation ratio of 14.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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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