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.
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 leverage their financial strength to beat the competition and one that may struggle to keep up.
One Stock to Sell:
Live Nation (LYV)
Trailing 12-Month GAAP Operating Margin: 3%
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.
Why Do We Avoid LYV?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.6% for the last two years
- Poor expense management has led to an operating margin of 3.6% that is below the industry average
- Projected 1.5 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
At $171.55 per share, Live Nation trades at 127.9x forward P/E. Check out our free in-depth research report to learn more about why LYV doesn’t pass our bar.
Two Stocks to Buy:
CECO Environmental (CECO)
Trailing 12-Month GAAP Operating Margin: 5.7%
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Why Will CECO Outperform?
- Annual revenue growth of 19.9% over the past two years was outstanding, reflecting market share gains this cycle
- Projected revenue growth of 83% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Share repurchases over the last two years enabled its annual earnings per share growth of 23.6% to outpace its revenue gains
CECO Environmental’s stock price of $95.62 implies a valuation ratio of 46x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Riley Exploration Permian (REPX)
Trailing 12-Month GAAP Operating Margin: 31.6%
Operating in counties where legacy oil fields have been producing since the early 1900s, Riley Exploration Permian (NYSE: REPX) drills for and produces oil and natural gas from horizontal wells in the Permian Basin of West Texas and New Mexico.
Why Is REPX a Good Business?
- Annual revenue growth of 30.8% over the past eight years was outstanding, reflecting market share gains this cycle
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 76.6%
- Robust free cash flow margin of 17.3% gives it many options for capital deployment
Riley Exploration Permian is trading at $32.69 per share, or 4.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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.
