Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here are three profitable companies that don’t make the cut and some better opportunities instead.

Papa John's (PZZA)

Trailing 12-Month GAAP Operating Margin: 4.5%

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 Should You Sell PZZA?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Lacking pricing power results in an inferior gross margin of 12.1% that must be offset by turning more tables
3. Efficiency has decreased over the last year as its operating margin fell by 3.6 percentage points

Papa John’s stock price of $35.34 implies a valuation ratio of 20.8x forward P/E. If you’re considering PZZA for your portfolio, see our FREE research report to learn more.

Knowles (KN)

Trailing 12-Month GAAP Operating Margin: 12.3%

With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.

Why Are We Out on KN?

1. Annual sales declines of 3.7% for the past five years show its products and services struggled to connect with the market during this cycle
2. Subscale operations are evident in its revenue base of $573.5 million, meaning it has fewer distribution channels than its larger rivals
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.3% annually

Knowles is trading at $24.25 per share, or 20.4x forward P/E. To fully understand why you should be careful with KN, check out our full research report (it’s free).

Cohen & Steers (CNS)

Trailing 12-Month GAAP Operating Margin: 32.1%

Founded in 1986 as a pioneer in real estate investment trusts (REITs), Cohen & Steers (NYSE: CNS) is an investment manager specializing in real estate securities, infrastructure, real assets, and preferred securities for institutional and individual investors.

Why Is CNS Not Exciting?

1. Sales trends were unexciting over the last five years as its 5.4% annual growth was below the typical financials company
2. Annual earnings per share growth of 3.7% underperformed its revenue over the last five years, showing its incremental sales were less profitable

At $63.68 per share, Cohen & Steers trades at 19.4x forward P/E. Read our free research report to see why you should think twice about including CNS in your portfolio.

Stocks We Like More

Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.