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.

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 two profitable companies that leverage their financial strength to beat the competition 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 Worry Us?

1. Lackluster 1.2% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Number of skier visits has disappointed over the past two years, indicating weak demand for its offerings
3. Projected sales growth of 3.3% for the next 12 months suggests sluggish demand

At $146.78 per share, Vail Resorts trades at 18x forward P/E. Dive into our free research report to see why there are better opportunities than MTN.

Two Stocks to Watch:

Broadcom (AVGO)

Trailing 12-Month GAAP Operating Margin: 37.7%

Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.

Why Are We Bullish on AVGO?

1. Annual revenue growth of 30% over the last two years was superb and indicates its market share increased during this cycle
2. Superior product capabilities and pricing power result in a best-in-class gross margin of 76.1%
3. AVGO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

Broadcom’s stock price of $334.54 implies a valuation ratio of 43.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Ulta (ULTA)

Trailing 12-Month GAAP Operating Margin: 13.6%

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Why Are We Fans of ULTA?

1. Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
2. Strong free cash flow margin of 8.5% enables it to reinvest or return capital consistently
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Ulta is trading at $539 per share, or 21.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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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