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 generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Archer-Daniels-Midland (ADM)
Trailing 12-Month GAAP Operating Margin: 1.8%
Transforming crops from the world's most productive agricultural regions into everyday essentials, Archer-Daniels-Midland (NYSE: ADM) processes and transports agricultural commodities like grains and oilseeds while manufacturing ingredients for food, beverages, feed, and industrial applications.
Why Are We Wary of ADM?
- Products aren’t resonating with the market as its revenue declined by 7.5% annually over the last three years
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 6.3%
- Earnings per share have contracted by 24.7% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Archer-Daniels-Midland is trading at $76.49 per share, or 14.7x forward P/E. Read our free research report to see why you should think twice about including ADM in your portfolio.
Two Stocks to Watch:
Upstart (UPST)
Trailing 12-Month GAAP Operating Margin: 3.5%
Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ: UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.
Why Will UPST Beat the Market?
- Loan originations on its platform are soaring as they averaged 56.6% growth over the last year, enabling the company to collect more fees and expand into new markets like credit cards.
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Projected to achieve positive free cash flow next year, indicating the company is at a pivotal stage in its life
Upstart’s stock price of $31.09 implies a valuation ratio of 2.1x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Halozyme Therapeutics (HALO)
Trailing 12-Month GAAP Operating Margin: 33.9%
Known for transforming hours-long intravenous infusions into minutes-long subcutaneous injections, Halozyme Therapeutics (NASDAQ: HALO) develops and licenses its proprietary ENHANZE technology that enables subcutaneous delivery of injectable drugs that would otherwise require intravenous administration.
Why Are We Fans of HALO?
- Market share has increased this cycle as its 32.2% annual revenue growth over the last two years was exceptional
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 28.7% annually
- Strong free cash flow margin of 46.2% enables it to reinvest or return capital consistently
At $68.70 per share, Halozyme Therapeutics trades at 4.6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
