Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that balance growth and profitability and one that may face some trouble.
One Stock to Sell:
Paylocity (PCTY)
Trailing 12-Month GAAP Operating Margin: 19.1%
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ: PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Why Do We Think Twice About PCTY?
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its three-year trend
- High servicing costs result in a relatively inferior gross margin of 68.9% that must be offset through increased usage
Paylocity is trading at $174.22 per share, or 5.7x forward price-to-sales. To fully understand why you should be careful with PCTY, check out our full research report (it’s free).
Two Stocks to Watch:
Palantir Technologies (PLTR)
Trailing 12-Month GAAP Operating Margin: 16.6%
Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ: PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.
Why Will PLTR Beat the Market?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 44.2% over the last year
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $157.34 per share, Palantir Technologies trades at 82.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Waste Management (WM)
Trailing 12-Month GAAP Operating Margin: 17.5%
Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.
Why Do We Like WM?
- Annual revenue growth of 9.7% over the last five years beat the sector average and underscores the unique value of its offerings
- Superior product capabilities and pricing power lead to a premier gross margin of 38.6%
- Highly efficient business model is illustrated by its impressive 17.4% operating margin
Waste Management’s stock price of $225.14 implies a valuation ratio of 27.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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