Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 are two profitable companies that balance growth and profitability and one that may struggle to keep up.
One Stock to Sell:
Papa John's (PZZA)
Trailing 12-Month GAAP Operating Margin: 6.9%
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Does PZZA Give Us Pause?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
- Estimated sales growth of 1.7% for the next 12 months implies demand will slow from its six-year trend
- Lacking pricing power results in an inferior gross margin of 14.8% that must be offset by turning more tables
Papa John's is trading at $47.29 per share, or 22.8x forward P/E. If you’re considering PZZA for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Doximity (DOCS)
Trailing 12-Month GAAP Operating Margin: 40.1%
With over 80% of U.S. physicians as members of its digital community, Doximity (NYSE: DOCS) operates a digital platform that enables physicians and other healthcare professionals to collaborate, stay current with medical news, manage their careers, and conduct virtual patient visits.
Why Do We Watch DOCS?
- Average billings growth of 19.8% over the last year enhances its liquidity and shows there is steady demand for its products
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $68.53 per share, Doximity trades at 21.3x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Bloom Energy (BE)
Trailing 12-Month GAAP Operating Margin: 4.4%
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Will BE Outperform?
- Annual revenue growth of 15.8% over the past five years was outstanding, reflecting market share gains this cycle
- Free cash flow margin is now positive, showing the company has crossed a key inflection point
- Improving returns on capital suggest its past investments are beginning to deliver value
Bloom Energy’s stock price of $55.30 implies a valuation ratio of 91.9x 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
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 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).
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 Kadant (+351% 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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