Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Grid Dynamics (GDYN)
Trailing 12-Month GAAP Operating Margin: 1.6%
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
Why Are We Cautious About GDYN?
- Revenue base of $389.2 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 3.3% annually while its revenue grew
- Negative returns on capital show that some of its growth strategies have backfired
Grid Dynamics’s stock price of $8 implies a valuation ratio of 17.5x forward P/E. Dive into our free research report to see why there are better opportunities than GDYN.
Two Stocks to Buy:
Coinbase (COIN)
Trailing 12-Month GAAP Operating Margin: 26.9%
Widely regarded as the face of crypto, Coinbase (NASDAQ: COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Are We Backing COIN?
- 56.8% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 96.4% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
At $303.30 per share, Coinbase trades at 25.3x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Shift4 (FOUR)
Trailing 12-Month GAAP Operating Margin: 7.2%
Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE: FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.
Why Are We Bullish on FOUR?
- Annual revenue growth of 27.4% over the last two years was superb and indicates its market share increased during this cycle
- Additional sales over the last two years increased its profitability as the 58.9% annual growth in its earnings per share outpaced its revenue
Shift4 is trading at $87.36 per share, or 17.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-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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