Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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

Resideo (REZI)

Trailing 12-Month GAAP Operating Margin: 8.2%

Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.

Why Are We Wary of REZI?

1. Estimated sales growth of 2.9% for the next 12 months implies demand will slow from its two-year trend
2. Free cash flow margin shrank by 22.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Resideo is trading at $35.68 per share, or 12.8x forward P/E. Dive into our free research report to see why there are better opportunities than REZI.

Corcept (CORT)

Trailing 12-Month GAAP Operating Margin: 8.8%

Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.

Why Are We Hesitant About CORT?

1. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 24.7 percentage points
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.5% annually while its revenue grew
3. Free cash flow margin dropped by 21.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Corcept’s stock price of $40.70 implies a valuation ratio of 65.2x forward P/E. To fully understand why you should be careful with CORT, check out our full research report (it’s free).

Omnicom Group (OMC)

Trailing 12-Month GAAP Operating Margin: 13.1%

With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE: OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.

Why Does OMC Worry Us?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Free cash flow margin shrank by 7.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Eroding returns on capital suggest its historical profit centers are aging

At $68.25 per share, Omnicom Group trades at 8x forward P/E. If you’re considering OMC for your portfolio, see our FREE research report to learn more.

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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.