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.
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 is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.
Two Stocks to Sell:
Delta (DAL)
Trailing 12-Month GAAP Operating Margin: 9.7%
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE: DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Are We Cautious About DAL?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Anticipated sales growth of 3.9% for the next year implies demand will be shaky
- Poor free cash flow margin of 3.6% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Delta is trading at $57.84 per share, or 8.4x forward P/E. Read our free research report to see why you should think twice about including DAL in your portfolio.
Jefferies (JEF)
Trailing 12-Month GAAP Operating Margin: 12.8%
Tracing its roots back to 1962 and rebranded from Leucadia National Corporation in 2018, Jefferies Financial Group (NYSE: JEF) is a global investment banking and capital markets firm that provides advisory services, securities trading, and asset management to corporations, institutions, and wealthy individuals.
Why Does JEF Fall Short?
- Sales trends were unexciting over the last five years as its 6.6% annual growth was below the typical financials company
- Annual earnings per share growth of 5.6% underperformed its revenue over the last five years, showing its incremental sales were less profitable
At $56.20 per share, Jefferies trades at 1.1x forward P/E. Dive into our free research report to see why there are better opportunities than JEF.
One Stock to Buy:
Shopify (SHOP)
Trailing 12-Month GAAP Operating Margin: 12.2%
Starting with just three people selling snowboards online in 2004, Shopify (NYSE: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
Why Will SHOP Beat the Market?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 30.8% over the last year
- Market share will likely rise over the next 12 months as its expected revenue growth of 25% is robust
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Shopify’s stock price of $159.23 implies a valuation ratio of 15.6x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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.
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