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. Keeping that in mind, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Box (BOX)
Trailing 12-Month GAAP Operating Margin: 6.1%
Known as the "Content Cloud" for managing the 90% of business data that exists as unstructured files and documents, Box (NYSE: BOX) provides a cloud-based platform that enables organizations to securely manage, share, and collaborate on their content from anywhere on any device.
Why Does BOX Fall Short?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 10% underwhelmed
- Projected sales growth of 7.9% for the next 12 months suggests sluggish demand
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Box is trading at $31.08 per share, or 3.9x forward price-to-sales. If you’re considering BOX for your portfolio, see our FREE research report to learn more.
Danaher (DHR)
Trailing 12-Month GAAP Operating Margin: 19%
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE: DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Why Are We Hesitant About DHR?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 7.9 percentage points
- Free cash flow margin dropped by 8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $211.03 per share, Danaher trades at 26.2x forward P/E. Read our free research report to see why you should think twice about including DHR in your portfolio.
One Stock to Watch:
Universal Health Services (UHS)
Trailing 12-Month GAAP Operating Margin: 11.5%
With a network spanning 39 states and three countries, Universal Health Services (NYSE: UHS) operates acute care hospitals and behavioral health facilities across the United States, United Kingdom, and Puerto Rico.
Why Does UHS Stand Out?
- Economies of scale give it some operating leverage when demand rises
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15% exceeded its revenue gains over the last five years
- Free cash flow margin grew by 6.9 percentage points over the last five years, giving the company more chips to play with
Universal Health Services’s stock price of $225.80 implies a valuation ratio of 9.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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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