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".
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here is one profitable company that balances growth and profitability and two that may face some trouble.
Two Stocks to Sell:
CONMED (CNMD)
Trailing 12-Month GAAP Operating Margin: 7.5%
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
Why Is CNMD Not Exciting?
- 5.1% annual revenue growth over the last two years was slower than its healthcare peers
- Subscale operations are evident in its revenue base of $1.37 billion, meaning it has fewer distribution channels than its larger rivals
- Forecasted revenue decline of 1.3% for the upcoming 12 months implies demand will fall off a cliff
CONMED’s stock price of $45.91 implies a valuation ratio of 10.6x forward P/E. Read our free research report to see why you should think twice about including CNMD in your portfolio.
Waste Connections (WCN)
Trailing 12-Month GAAP Operating Margin: 18.1%
Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE: WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.
Why Does WCN Fall Short?
- Estimated sales growth of 4.9% for the next 12 months implies demand will slow from its two-year trend
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.5 percentage points
- ROIC of 6.6% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $167.05 per share, Waste Connections trades at 30.6x forward P/E. If you’re considering WCN for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
O'Reilly (ORLY)
Trailing 12-Month GAAP Operating Margin: 19.5%
Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ: ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.
Why Should You Buy ORLY?
- Same-store sales growth averaged 3.8% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Highly efficient business model is illustrated by its impressive 19.5% operating margin
- ROIC punches in at 42.5%, illustrating management’s expertise in identifying profitable investments
O'Reilly is trading at $91.15 per share, or 28.3x 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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.
