Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
MarineMax (HZO)
Trailing 12-Month GAAP Operating Margin: 6.2%
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.
Why Does HZO Give Us Pause?
- Store closures and disappointing same-store sales suggest demand is sluggish and it’s rightsizing its operations
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
MarineMax’s stock price of $22.41 implies a valuation ratio of 8.7x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than HZO.
Two Stocks to Watch:
CAVA (CAVA)
Trailing 12-Month GAAP Operating Margin: 4.5%
Starting from a single Washington, D.C. location, CAVA (NYSE:CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Do We Watch CAVA?
- Average same-store sales growth of 16% over the past two years indicates its restaurants are resonating with diners
- Additional sales over the last three years increased its profitability as the 69.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 11.2 percentage points over the last year, giving the company more chips to play with
At $93 per share, CAVA trades at 157x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Boston Scientific (BSX)
Trailing 12-Month GAAP Operating Margin: 16.2%
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE:BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Is BSX on Our Radar?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 14.9% over the past two years
- Forecasted revenue growth of 14.4% for the next 12 months indicates its momentum over the last two years is sustainable
- Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 12.3% outpaced its revenue gains
Boston Scientific is trading at $102.69 per share, or 34.7x forward price-to-earnings. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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 6 Stocks for this week. 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.