Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
NXP Semiconductors (NXPI)
Trailing 12-Month GAAP Operating Margin: 24.7%
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Does NXPI Give Us Pause?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.4% annually over the last two years
- Anticipated sales growth of 9.1% for the next year implies demand will be shaky
- Free cash flow margin shrank by 10.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $237.50 per share, NXP Semiconductors trades at 17.7x forward P/E. If you’re considering NXPI for your portfolio, see our FREE research report to learn more.
Post (POST)
Trailing 12-Month GAAP Operating Margin: 9.8%
Founded in 1895, Post (NYSE: POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Why Are We Hesitant About POST?
- Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend
- Underwhelming 5.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Post’s stock price of $99.50 implies a valuation ratio of 14.1x forward P/E. Read our free research report to see why you should think twice about including POST in your portfolio.
One Stock to Watch:
Match Group (MTCH)
Trailing 12-Month GAAP Operating Margin: 23.4%
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Why Could MTCH Be a Winner?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 7.9% annual growth in its average revenue per user
- Excellent EBITDA margin of 35.7% highlights the efficiency of its business model
- Robust free cash flow margin of 26.7% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Match Group is trading at $31.53 per share, or 8.2x forward EV/EBITDA. 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
