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".
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. 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:
PVH (PVH)
Trailing 12-Month GAAP Operating Margin: 2.2%
Founded in 1881 by a husband and wife duo, PVH (NYSE: PVH) is a global fashion conglomerate with iconic brands like Calvin Klein and Tommy Hilfiger.
Why Should You Sell PVH?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.6% for the last two years
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
PVH is trading at $68.48 per share, or 6.1x forward P/E. To fully understand why you should be careful with PVH, check out our full research report (it’s free).
Two Stocks to Buy:
Meta (META)
Trailing 12-Month GAAP Operating Margin: 41.4%
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 Is META a Good Business?
- 29.9% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Share buybacks catapulted its annual earnings per share growth to 51.3%, which outperformed its revenue gains over the last three years
- META is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $638.47 per share, Meta trades at 11.9x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
AppLovin (APP)
Trailing 12-Month GAAP Operating Margin: 75.8%
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ: APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
Why Is APP a Top Pick?
- Impressive 29.2% annual revenue growth over the last two years indicates it’s winning market share
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Strong free cash flow margin of 72.5% enables it to reinvest or return capital consistently
AppLovin’s stock price of $378.25 implies a valuation ratio of 17.7x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
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.
