Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. 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:
Comcast (CMCSA)
Trailing 12-Month GAAP Operating Margin: 18%
Formerly known as American Cable Systems, Comcast (NASDAQ:CMCSA) is a multinational telecommunications company offering a wide range of services.
Why Do We Think CMCSA Will Underperform?
- Performance surrounding its domestic broadband customers has lagged its peers
- Projected sales growth of 2.7% for the next 12 months suggests sluggish demand
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.1 percentage points
Comcast’s stock price of $27.81 implies a valuation ratio of 6.6x forward P/E. Check out our free in-depth research report to learn more about why CMCSA doesn’t pass our bar.
Crocs (CROX)
Trailing 12-Month GAAP Operating Margin: 5%
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.
Why Does CROX Give Us Pause?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Projected sales decline of 2.6% for the next 12 months points to a tough demand environment ahead
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $74.92 per share, Crocs trades at 6.5x forward P/E. Read our free research report to see why you should think twice about including CROX in your portfolio.
One Stock to Buy:
Costco (COST)
Trailing 12-Month GAAP Operating Margin: 3.8%
Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.
Why Should You Buy COST?
- Comparable store sales rose by 5.6% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Enormous revenue base of $275.2 billion compensates for its low gross margin and provides significant leverage in supplier negotiations
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Costco is trading at $913.49 per share, or 45.6x 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 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 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 (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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