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".
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 are two profitable companies that balance growth and profitability and one that may face some trouble.
One Stock to Sell:
Vail Resorts (MTN)
Trailing 12-Month GAAP Operating Margin: 19.1%
Founded by two Aspen, Colorado ski patrol guides, Vail Resorts (NYSE:MTN) is a mountain resort company offering luxury experiences in over 30 locations across the globe.
Why Does MTN Give Us Pause?
- Lackluster 1.2% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Number of skier visits has disappointed over the past two years, indicating weak demand for its offerings
- Anticipated sales growth of 3.4% for the next year implies demand will be shaky
Vail Resorts is trading at $164 per share, or 20.2x forward P/E. Dive into our free research report to see why there are better opportunities than MTN.
Two Stocks to Watch:
Leonardo DRS (DRS)
Trailing 12-Month GAAP Operating Margin: 9.2%
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services.
Why Should DRS Be on Your Watchlist?
- Sales pipeline is in good shape as its backlog averaged 54.4% growth over the past two years
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 17.5% annually, topping its revenue gains
- Free cash flow margin increased by 4.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Leonardo DRS’s stock price of $45.40 implies a valuation ratio of 41.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Gilead Sciences (GILD)
Trailing 12-Month GAAP Operating Margin: 28.6%
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Fans of GILD?
- Economies of scale give it some operating leverage when demand rises
- Adjusted operating margin expanded by 17.8 percentage points over the last five years as it scaled and became more efficient
- GILD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $111.70 per share, Gilead Sciences trades at 13.6x 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
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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