Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here is one profitable company that balances growth and profitability and two that may face some trouble.

Two Stocks to Sell:

Deere (DE)

Trailing 12-Month GAAP Operating Margin: 12.8%

Revolutionizing agriculture with the first self-polishing cast-steel plow in the 1800s, Deere (NYSE: DE) manufactures and distributes advanced agricultural, construction, forestry, and turf care equipment.

Why Do We Think DE Will Underperform?

1. Annual sales declines of 10.1% for the past two years show its products and services struggled to connect with the market during this cycle
2. Earnings per share have dipped by 27.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
3. Eroding returns on capital suggest its historical profit centers are aging

Deere is trading at $589.04 per share, or 29.7x forward P/E. To fully understand why you should be careful with DE, check out our full research report (it’s free).

Darling Ingredients (DAR)

Trailing 12-Month GAAP Operating Margin: 7.5%

Turning what others consider waste into valuable resources, Darling Ingredients (NYSE: DAR) collects and transforms animal by-products, used cooking oil, and other bio-nutrients into valuable ingredients for food, feed, fuel, and industrial applications.

Why Are We Cautious About DAR?

1. Sales tumbled by 3.2% annually over the last three years, showing consumer trends are working against it
2. Gross margin of 23.8% is below its competitors, leaving less money to invest in areas like marketing and production facilities
3. Earnings per share have contracted by 25.6% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance

Darling Ingredients’s stock price of $53.55 implies a valuation ratio of 10.5x forward P/E. If you’re considering DAR for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Sea (SE)

Trailing 12-Month GAAP Operating Margin: 8.3%

Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Why Will SE Outperform?

1. Paying Users have grown by 22.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 12.6% annually
3. Free cash flow margin jumped by 18.4 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $91.11 per share, Sea trades at 3.9x forward price-to-gross profit. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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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.