Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 are three profitable companies that don’t make the cut and some better opportunities instead.
GoDaddy (GDDY)
Trailing 12-Month GAAP Operating Margin: 21.9%
Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE: GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.
Why Do We Pass on GDDY?
- Underwhelming ARR growth of 8.4% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.5%
- High servicing costs result in a relatively inferior gross margin of 63.6% that must be offset through increased usage
At $96.62 per share, GoDaddy trades at 2.6x forward price-to-sales. Check out our free in-depth research report to learn more about why GDDY doesn’t pass our bar.
Skyworks Solutions (SWKS)
Trailing 12-Month GAAP Operating Margin: 10.4%
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Why Are We Out on SWKS?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Forecasted revenue decline of 8.1% for the upcoming 12 months implies demand will fall even further
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 18.7 percentage points
Skyworks Solutions’s stock price of $62.30 implies a valuation ratio of 13.7x forward P/E. Read our free research report to see why you should think twice about including SWKS in your portfolio.
Option Care Health (OPCH)
Trailing 12-Month GAAP Operating Margin: 6%
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ: OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Why Are We Wary of OPCH?
Option Care Health is trading at $33.12 per share, or 18.2x forward P/E. If you’re considering OPCH for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
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 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
