While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that balances growth and profitability and two that may struggle to keep up.

Two Stocks to Sell:

First Watch (FWRG)

Trailing 12-Month GAAP Operating Margin: 1.7%

Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.

Why Are We Wary of FWRG?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

First Watch’s stock price of $16.49 implies a valuation ratio of 49.3x forward P/E. Check out our free in-depth research report to learn more about why FWRG doesn’t pass our bar.

SunOpta (STKL)

Trailing 12-Month GAAP Operating Margin: 3.3%

Committed to clean-label foods, SunOpta (NASDAQ: STKL) is a sustainability-focused food and beverage company specializing in the sourcing, processing, and packaging of organic products.

Why Are We Cautious About STKL?

1. Annual sales declines of 4.9% for the past three years show its products struggled to connect with the market
2. Modest revenue base of $763.2 million gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 15.6%

SunOpta is trading at $5.34 per share, or 22x forward P/E. If you’re considering STKL for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Intuitive Surgical (ISRG)

Trailing 12-Month GAAP Operating Margin: 29.3%

Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.

Why Is ISRG on Our Radar?

1. Products are seeing elevated demand as its system placement averaged 12.7% growth over the past two years
2. Estimated revenue growth of 14.2% for the next 12 months implies its momentum over the last two years will continue
3. Earnings per share have massively outperformed its peers over the last five years, increasing by 20.9% annually

At $526.35 per share, Intuitive Surgical trades at 57.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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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