Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Weatherford (WFRD)
Trailing 12-Month GAAP Operating Margin: 15.4%
Operating in roughly 75 countries with over 300 facilities worldwide, Weatherford (NASDAQ: WFRD) provides equipment and services for drilling, completing, and maintaining oil and gas wells.
Why Does WFRD Give Us Pause?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.3% annually over the last ten years
- Gross margin of 31.5% reflects its high production costs and unfavorable asset base
Weatherford is trading at $94.63 per share, or 16.9x forward P/E. If you’re considering WFRD for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Karat Packaging (KRT)
Trailing 12-Month GAAP Operating Margin: 8.7%
Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.
Why Could KRT Be a Winner?
- Annual revenue growth of 9.6% over the last five years beat the sector average and underscores the unique value of its offerings
- Free cash flow margin jumped by 7.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- ROIC punches in at 17.3%, illustrating management’s expertise in identifying profitable investments, and its returns are climbing as it finds even more attractive growth opportunities
Karat Packaging’s stock price of $27.95 implies a valuation ratio of 13.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
SEI Investments (SEIC)
Trailing 12-Month GAAP Operating Margin: 27.3%
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ: SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Are We Bullish on SEIC?
- Decent 9.4% annual revenue growth over the last two years beat most of its peers, showing customers find value in its products and services
- Share buybacks catapulted its annual earnings per share growth to 26.5%, which outperformed its revenue gains over the last two years
- ROE punches in at 26.7%, illustrating management’s expertise in identifying profitable investments
At $78.46 per share, SEI Investments trades at 13.6x 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
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
