Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
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 generates reliable profits without sacrificing growth and two that may face some trouble.
Two Stocks to Sell:
Bloomin' Brands (BLMN)
Trailing 12-Month GAAP Operating Margin: 1.7%
Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ: BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Why Should You Dump BLMN?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $6.73 per share, Bloomin' Brands trades at 7.1x forward P/E. Dive into our free research report to see why there are better opportunities than BLMN.
Zebra (ZBRA)
Trailing 12-Month GAAP Operating Margin: 15%
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Why Are We Wary of ZBRA?
- 1.7% annual revenue growth over the last two years was slower than its business services peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- 7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Zebra is trading at $261.89 per share, or 15.1x forward P/E. To fully understand why you should be careful with ZBRA, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Colgate-Palmolive (CL)
Trailing 12-Month GAAP Operating Margin: 21.3%
Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE: CL) is a consumer products company that focuses on personal, household, and pet products.
Why Do We Like CL?
- Unparalleled brand awareness is evident in its $20.1 billion revenue base, which gives it advantageous terms because retailers must stock its products
- Products command premium prices and result in a best-in-class gross margin of 60.3%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Colgate-Palmolive’s stock price of $77.56 implies a valuation ratio of 20.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. 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 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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