Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 is one profitable company that balances growth and profitability and two that may face some trouble.
Two Stocks to Sell:
Rush Enterprises (RUSHA)
Trailing 12-Month GAAP Operating Margin: 5.3%
Headquartered in Texas, Rush Enterprises (NASDAQ: RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.
Why Do We Pass on RUSHA?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.1% annually over the last two years
- Gross margin of 20.3% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share have contracted by 11.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Rush Enterprises is trading at $64.25 per share, or 17.9x forward P/E. Check out our free in-depth research report to learn more about why RUSHA doesn’t pass our bar.
Dolby Laboratories (DLB)
Trailing 12-Month GAAP Operating Margin: 18.5%
Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE: DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media.
Why Do We Think DLB Will Underperform?
- Muted 1.2% annual revenue growth over the last five years shows its demand lagged behind its software peers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2.2 percentage points
At $63.97 per share, Dolby Laboratories trades at 4.4x forward price-to-sales. If you’re considering DLB for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Boston Scientific (BSX)
Trailing 12-Month GAAP Operating Margin: 18%
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Does BSX Stand Out?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 16.6% over the past two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 26% over the last five years outstripped its revenue performance
- Free cash flow margin increased by 7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Boston Scientific’s stock price of $70.06 implies a valuation ratio of 20.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
