3 Profitable Stocks with Questionable Fundamentals

September 11, 2025 at 00:38 AM EDT

VPG Cover Image

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 are three profitable companies to steer clear of and a few better alternatives.

Vishay Precision (VPG)

Trailing 12-Month GAAP Operating Margin: 2.6%

Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE: VPG) operates as a global provider of precision measurement and sensing technologies.

Why Do We Avoid VPG?

Sales tumbled by 10.2% annually over the last two years, showing market trends are working against its favor during this cycle
Incremental sales over the last five years were much less profitable as its earnings per share fell by 17.4% annually while its revenue grew
Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $29.79 per share, Vishay Precision trades at 29.2x forward P/E. Check out our free in-depth research report to learn more about why VPG doesn’t pass our bar.

IBM (IBM)

Trailing 12-Month GAAP Operating Margin: 16.1%

With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.

Why Are We Hesitant About IBM?

Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 3.3% annually
ROIC of 11.5% reflects management’s challenges in identifying attractive investment opportunities

IBM’s stock price of $256.99 implies a valuation ratio of 22.7x forward P/E. To fully understand why you should be careful with IBM, check out our full research report (it’s free).

NetApp (NTAP)

Trailing 12-Month GAAP Operating Margin: 20.7%

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Are We Cautious About NTAP?

Annual revenue growth of 3.1% over the last two years was below our standards for the business services sector
Projected sales growth of 4% for the next 12 months suggests sluggish demand

NetApp is trading at $123.63 per share, or 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than NTAP.

Stocks We Like More

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3 Profitable Stocks with Questionable Fundamentals

Vishay Precision (VPG)

IBM (IBM)

NetApp (NTAP)

Stocks We Like More

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