Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one that may face some trouble.
One Stock to Sell:
ADT (ADT)
Trailing 12-Month GAAP Operating Margin: 25.6%
Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE: ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
Why Does ADT Fall Short?
- Number of customers has disappointed over the past two years, indicating weak demand for its offerings
- Anticipated sales growth of 3.6% for the next year implies demand will be shaky
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
ADT is trading at $8.82 per share, or 10.1x forward P/E. To fully understand why you should be careful with ADT, check out our full research report (it’s free).
Two Stocks to Watch:
VeriSign (VRSN)
Trailing 12-Month GAAP Operating Margin: 67.9%
As the silent guardian of the internet's roadmap, VeriSign (NASDAQ: VRSN) operates the authoritative registry for .com and .net domain names, enabling websites to be found reliably when users type web addresses.
Why Is VRSN on Our Radar?
- Average billings growth of 15.3% over the last year enhances its liquidity and shows there is steady demand for its products
- Software is difficult to replicate at scale and results in a best-in-class gross margin of 87.9%
- VRSN is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
VeriSign’s stock price of $270 implies a valuation ratio of 15.2x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
CAVA (CAVA)
Trailing 12-Month GAAP Operating Margin: 4.9%
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Is CAVA Interesting?
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Earnings per share grew by 200% annually over the last one years and trumped its peers
- Free cash flow margin grew by 3.1 percentage points over the last year, giving the company more chips to play with
At $68.75 per share, CAVA trades at 110.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 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-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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