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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here are two profitable companies that balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
BlackLine (BL)
Trailing 12-Month GAAP Operating Margin: 3.6%
Born from the vision to eliminate tedious manual spreadsheet work for accountants, BlackLine (NASDAQ: BL) provides cloud-based software that automates and streamlines financial close, intercompany accounting, and invoice-to-cash processes for accounting departments.
Why Is BL Not Exciting?
- Average billings growth of 8.5% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Below-average net revenue retention rate of 104% suggests it has some trouble expanding within existing accounts
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
BlackLine is trading at $35.37 per share, or 3.4x forward price-to-sales. Read our free research report to see why you should think twice about including BL in your portfolio.
Two Stocks to Watch:
BioMarin Pharmaceutical (BMRN)
Trailing 12-Month GAAP Operating Margin: 12.7%
Pioneering treatments for conditions that often had no previous therapeutic options, BioMarin Pharmaceutical (NASDAQ: BMRN) develops and commercializes therapies that address the root causes of rare genetic disorders, particularly those affecting children.
Why Do We Like BMRN?
- Annual revenue growth of 15.4% over the last two years beat the sector average and underscores the unique value of its offerings
- Additional sales over the last five years increased its profitability as the 13.8% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 17.2 percentage points over the last five years, giving the company more capital to invest or return to shareholders
BioMarin Pharmaceutical’s stock price of $55.11 implies a valuation ratio of 10.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Globus Medical (GMED)
Trailing 12-Month GAAP Operating Margin: 16.3%
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Why Could GMED Be a Winner?
- Constant currency growth averaged 22.3% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Earnings per share have massively outperformed its peers over the last five years, increasing by 22.8% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $91.66 per share, Globus Medical trades at 19.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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.
