Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that leverages its financial strength to beat the competition and two that may face some trouble.
Two Stocks to Sell:
GameStop (GME)
Trailing 12-Month GAAP Operating Margin: 1.3%
Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE:GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.
Why Should You Dump GME?
- GameStop’s brick-and-mortar engine keeps stalling as gamers migrate to digital downloads, and management is closing more outlets after shuttering hundreds of stores last year
- The share price remains an unpredictable meme-stock roller-coaster, and the purchase of thousands of Bitcoins have fueled huge swings
- On the bright side, the company has a large cash pile that gives CEO Ryan Cohen room to buy more Bitcoin or fund its collectibles and trading-card push
GameStop is trading at $23.14 per share, or 46.2x forward P/E. Check out our free in-depth research report to learn more about why GME doesn’t pass our bar.
Acuity Brands (AYI)
Trailing 12-Month GAAP Operating Margin: 13%
One of the pioneers of smart lights, Acuity (NYSE:AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Are We Cautious About AYI?
- 1.4% annual revenue growth over the last two years was slower than its industrials peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
At $319.38 per share, Acuity Brands trades at 17.2x forward P/E. If you’re considering AYI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Universal Display (OLED)
Trailing 12-Month GAAP Operating Margin: 38.9%
Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Why Are We Positive On OLED?
- Solid 12.4% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 75.4%
- Highly efficient business model is illustrated by its impressive 38.1% operating margin
Universal Display’s stock price of $141 implies a valuation ratio of 30.4x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full 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 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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