A company with profits isn’t always 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. That said, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Central Garden & Pet (CENT)
Trailing 12-Month GAAP Operating Margin: 7.5%
Enhancing the lives of both pets and homeowners, Central Garden & Pet (NASDAQ:CENT) is a leading producer and distributor of essential products for pet care, lawn and garden maintenance, and pest control.
Why Do We Steer Clear of CENT?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 1.5% annually
Central Garden & Pet’s stock price of $33.91 implies a valuation ratio of 15.1x forward P/E. To fully understand why you should be careful with CENT, check out our full research report (it’s free).
Pursuit (PRSU)
Trailing 12-Month GAAP Operating Margin: 8%
With attractions ranging from glacier tours in the Canadian Rockies to an oceanfront geothermal lagoon in Iceland, Pursuit Attractions and Hospitality (NYSE:PRSU) operates iconic travel experiences, experiential marketing services, and exhibition management across North America and Europe.
Why Is PRSU Risky?
- Annual sales declines of 2.4% for the past five years show its products and services struggled to connect with the market
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Negative returns on capital show that some of its growth strategies have backfired
At $29.54 per share, Pursuit trades at 118.2x forward P/E. Check out our free in-depth research report to learn more about why PRSU doesn’t pass our bar.
One Stock to Buy:
ServiceNow (NOW)
Trailing 12-Month GAAP Operating Margin: 12.9%
Founded by Fred Luddy, who coded the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) is a software provider helping companies automate workflows across IT, HR, and customer service.
Why Do We Love NOW?
- Sales pipeline is in good shape as its remaining performance obligations (cRPO) averaged 22.3% growth over the last year
- Highly efficient business model is illustrated by its impressive 12.9% operating margin, and its operating leverage amplified its profits over the last year
- NOW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
ServiceNow is trading at $955.70 per share, or 14.7x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks That Overcame Trump’s 2018 Tariffs
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.