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. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble.

Two Stocks to Sell:

Analog Devices (ADI)

Trailing 12-Month GAAP Operating Margin: 24.6%

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Why Does ADI Fall Short?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 10.1% annually over the last two years
2. Underwhelming 6.5% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its falling returns suggest its earlier profit pools are drying up

Analog Devices’s stock price of $226.25 implies a valuation ratio of 24.6x forward P/E. To fully understand why you should be careful with ADI, check out our full research report (it’s free for active Edge members).

Global Industrial (GIC)

Trailing 12-Month GAAP Operating Margin: 6.9%

Formerly known as Systemax, Global Industrial (NYSE: GIC) distributes industrial and commercial products to businesses and institutions.

Why Do We Pass on GIC?

1. Muted 4.9% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 1.4% annually while its revenue grew
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $27.12 per share, Global Industrial trades at 13.9x forward P/E. Read our free research report to see why you should think twice about including GIC in your portfolio.

One Stock to Buy:

Enova (ENVA)

Trailing 12-Month GAAP Operating Margin: 12.5%

Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE: ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.

Why Is ENVA a Good Business?

1. Annual revenue growth of 22.7% over the past two years was outstanding, reflecting market share gains this cycle
2. Share buybacks catapulted its annual earnings per share growth to 34.1%, which outperformed its revenue gains over the last two years
3. Impressive 22% annual book value per share growth over the last five years indicates it’s building equity value this cycle

Enova is trading at $120.40 per share, or 8.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.