Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are three profitable companies to avoid and some better opportunities instead.

Akamai Technologies (AKAM)

Trailing 12-Month GAAP Operating Margin: 15%

With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ: AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online.

Why Should You Dump AKAM?

1. Sales trends were unexciting over the last two years as its 5.1% annual growth was well below the typical software company
2. Bad unit economics and steep infrastructure costs are reflected in its gross margin of 59.1%, one of the worst among software companies
3. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment

Akamai Technologies’s stock price of $96.93 implies a valuation ratio of 3.3x forward price-to-sales. If you’re considering AKAM for your portfolio, see our FREE research report to learn more.

Power Integrations (POWI)

Trailing 12-Month GAAP Operating Margin: 1.2%

A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ: POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.

Why Do We Steer Clear of POWI?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Anticipated sales growth of 1.9% for the next year implies demand will be shaky
3. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 22.1 percentage points

At $45.89 per share, Power Integrations trades at 42.3x forward P/E. To fully understand why you should be careful with POWI, check out our full research report (it’s free).

Sysco (SYY)

Trailing 12-Month GAAP Operating Margin: 3.7%

Powering more than 730,000 commercial kitchens across North America and Europe, Sysco (NYSE: SYY) is a global food distributor that supplies restaurants, healthcare facilities, schools, hotels, and other foodservice establishments with food products and related services.

Why Is SYY Risky?

1. Products are seeing elevated demand as its unit sales averaged 0.9% growth over the past two years
2. Free cash flow margin is expected to remain in place over the coming year
3. Returns on capital haven’t budged, indicating management couldn’t drive additional value creation

Sysco is trading at $83.51 per share, or 17.7x forward P/E. Check out our free in-depth research report to learn more about why SYY doesn’t pass our bar.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.