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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Cars.com (CARS)
Trailing 12-Month GAAP Operating Margin: 7.4%
Originally started as a joint venture between several media companies including The Washington Post and The New York Times, Cars.com (NYSE: CARS) is a digital marketplace that connects new and used car buyers and sellers.
Why Are We Wary of CARS?
- Dealer Customers have stagnated over the last two years, indicating its platform may be struggling to differentiate itself from competitors
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
At $12.39 per share, Cars.com trades at 3.5x forward EV/EBITDA. Read our free research report to see why you should think twice about including CARS in your portfolio.
Snap-on (SNA)
Trailing 12-Month GAAP Operating Margin: 25.6%
Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Do We Pass on SNA?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin shrank by 4.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
Snap-on is trading at $336.98 per share, or 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than SNA.
One Stock to Watch:
Goldman Sachs (GS)
Trailing 12-Month GAAP Operating Margin: 35.3%
Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE: GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.
Why Do We Like GS?
- 10.9% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 39.5% exceeded its revenue gains over the last two years
- ROE of 13% shows management can invest its resources competently
Goldman Sachs’s stock price of $793.08 implies a valuation ratio of 16.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 5 Growth Stocks for this month. 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 Exlservice (+354% 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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