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. That said, 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:
Crocs (CROX)
Trailing 12-Month GAAP Operating Margin: 3.7%
Founded in 2002, Crocs (NASDAQ: CROX) sells casual footwear and is known for its iconic clog shoe.
Why Do We Avoid CROX?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Free cash flow margin is forecasted to grow by 1.8 percentage points in the coming year, potentially giving the company more chips to play with
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $87.32 per share, Crocs trades at 6.8x forward P/E. Dive into our free research report to see why there are better opportunities than CROX.
Two Stocks to Watch:
Thermon (THR)
Trailing 12-Month GAAP Operating Margin: 16.4%
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Are We Positive On THR?
- Annual revenue growth of 12.4% over the past five years was outstanding, reflecting market share gains this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 46.1% outpaced its revenue gains
Thermon’s stock price of $49.00 implies a valuation ratio of 23.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
TTM Technologies (TTMI)
Trailing 12-Month GAAP Operating Margin: 9.1%
As one of the world's largest printed circuit board manufacturers with facilities spanning North America and Asia, TTM Technologies (NASDAQ: TTMI) manufactures printed circuit boards (PCBs) and radio frequency (RF) components for aerospace, defense, automotive, and telecommunications industries.
Why Is TTMI on Our Radar?
- Annual revenue growth of 14.1% over the last two years was superb and indicates its market share increased during this cycle
- Market share is on track to rise over the next 12 months as its 17.4% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 35.2% annually
TTM Technologies is trading at $114 per share, or 32.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
