Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here is one profitable company that balances growth and profitability and two best left off your watchlist.
Two Stocks to Sell:
Solventum (SOLV)
Trailing 12-Month GAAP Operating Margin: 9.3%
Founded in 1985, Solventum (NYSE: SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.
Why Do We Think Twice About SOLV?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales decline of 2.5% for the next 12 months implies a challenging demand environment
- Capital intensity has ramped up over the last four years as its free cash flow margin decreased by 15.7 percentage points
At $74.37 per share, Solventum trades at 13.1x forward P/E. If you’re considering SOLV for your portfolio, see our FREE research report to learn more.
AdaptHealth (AHCO)
Trailing 12-Month GAAP Operating Margin: 8.1%
With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ: AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.
Why Does AHCO Give Us Pause?
- Sales trends were unexciting over the last two years as its 2.7% annual growth was below the typical healthcare company
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.1% annually while its revenue grew
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
AdaptHealth’s stock price of $9.39 implies a valuation ratio of 7.6x forward P/E. To fully understand why you should be careful with AHCO, check out our full research report (it’s free).
One Stock to Watch:
Dave (DAVE)
Trailing 12-Month GAAP Operating Margin: 23%
Named after the biblical David fighting financial Goliaths, Dave (NASDAQ: DAVE) is a digital financial services platform that helps Americans living paycheck to paycheck with cash advances, banking services, and tools to improve their financial health.
Why Should DAVE Be on Your Watchlist?
- Market share has increased this cycle as its 35.3% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 82% annually, topping its revenue gains
Dave is trading at $229 per share, or 24.2x forward P/E. Is now the right time to buy? Find out in our full 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 5 Growth Stocks for this month. 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 Exlservice (+354% 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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