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".

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that balances growth and profitability and two best left off your watchlist.

Two Stocks to Sell:

Twilio (TWLO)

Trailing 12-Month GAAP Operating Margin: 1.5%

Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE: TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.

Why Are We Hesitant About TWLO?

1. Offerings struggled to generate meaningful interest as its average billings growth of 11.8% over the last year did not impress
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 8.4%
3. Bad unit economics and steep infrastructure costs are reflected in its gross margin of 50%, one of the worst among software companies

Twilio is trading at $114.49 per share, or 3.6x forward price-to-sales. Check out our free in-depth research report to learn more about why TWLO doesn’t pass our bar.

Lindsay (LNN)

Trailing 12-Month GAAP Operating Margin: 13.3%

A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.

Why Do We Think Twice About LNN?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4% annually

Lindsay’s stock price of $139.86 implies a valuation ratio of 22.1x forward P/E. If you’re considering LNN for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

EMCOR (EME)

Trailing 12-Month GAAP Operating Margin: 9.5%

Through its network of over 70 subsidiaries, EMCOR (NYSE: EME) provides electrical, mechanical, and building construction and services

Why Do We Love EME?

1. Impressive 15.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Share repurchases over the last two years enabled its annual earnings per share growth of 54.8% to outpace its revenue gains
3. Returns on capital are climbing as management makes more lucrative bets

At $697 per share, EMCOR trades at 26.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even More

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 5 Strong Momentum 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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