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. That said, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble.
Two Stocks to Sell:
Agilent (A)
Trailing 12-Month GAAP Operating Margin: 21.5%
Originally spun off from Hewlett-Packard in 1999 as its measurement and analytical division, Agilent Technologies (NYSE: A) provides analytical instruments, software, services, and consumables for laboratory workflows in life sciences, diagnostics, and applied chemical markets.
Why Do We Think Twice About A?
- Muted 4.5% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Diminishing returns on capital suggest its earlier profit pools are drying up
Agilent’s stock price of $132.85 implies a valuation ratio of 20.6x forward P/E. Check out our free in-depth research report to learn more about why A doesn’t pass our bar.
Elanco (ELAN)
Trailing 12-Month GAAP Operating Margin: 1.1%
Originally established as a division of pharmaceutical giant Eli Lilly before becoming independent in 2018, Elanco Animal Health (NYSE: ELAN) develops and sells medications, vaccines, and other health products for pets and farm animals across more than 90 countries.
Why Are We Cautious About ELAN?
- 4.9% annual revenue growth over the last five years was slower than its healthcare peers
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 2.9 percentage points
- Negative returns on capital show that some of its growth strategies have backfired
At $24.21 per share, Elanco trades at 22.6x forward P/E. Dive into our free research report to see why there are better opportunities than ELAN.
One Stock to Buy:
Meta (META)
Trailing 12-Month GAAP Operating Margin: 41.2%
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Why Are We Bullish on META?
- 29.6% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Excellent EBITDA margin of 61.8% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 56%, which outperformed its revenue gains over the last three years
Meta is trading at $592.75 per share, or 9.6x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
