Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 are two profitable companies that generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Bausch + Lomb (BLCO)
Trailing 12-Month GAAP Operating Margin: 2.2%
With a nearly 170-year history dedicated to vision care and eye health innovation, Bausch + Lomb (NYSE: BLCO) develops and manufactures a comprehensive range of eye health products including contact lenses, pharmaceuticals, surgical devices, and consumer eye care solutions.
Why Does BLCO Worry Us?
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
- Free cash flow margin shrank by 19.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $18.19 per share, Bausch + Lomb trades at 23.3x forward P/E. To fully understand why you should be careful with BLCO, check out our full research report (it’s free).
Two Stocks to Watch:
Freshworks (FRSH)
Trailing 12-Month GAAP Operating Margin: 1.6%
Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ: FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.
Why Are We Fans of FRSH?
- Ability to secure long-term commitments with customers is evident in its 17.7% ARR growth over the last year
- Software is difficult to replicate at scale and results in a stellar gross margin of 85%
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Freshworks is trading at $8.52 per share, or 2.5x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
AZZ (AZZ)
Trailing 12-Month GAAP Operating Margin: 15.8%
Responsible for projects like nuclear facilities, AZZ (NYSE: AZZ) is a provider of metal coating and power infrastructure solutions.
Why Do We Love AZZ?
- Market share has increased this cycle as its 12.7% annual revenue growth over the last five years was exceptional
- Additional sales over the last two years increased its profitability as the 22.3% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 25.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
AZZ’s stock price of $132.61 implies a valuation ratio of 20x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
