Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here is one profitable company that balances growth and profitability and two best left off your watchlist.

Two Stocks to Sell:

Kohl's (KSS)

Trailing 12-Month GAAP Operating Margin: 4%

Founded as a corner grocery store in Milwaukee, Wisconsin, Kohl’s (NYSE: KSS) is a department store chain that sells clothing, cosmetics, electronics, and home goods.

Why Should You Dump KSS?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
2. Sales are projected to tank by 1.2% over the next 12 months as its demand continues evaporating
3. Operating margin of 3.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments

Kohl’s stock price of $13.03 implies a valuation ratio of 9.5x forward P/E. Check out our free in-depth research report to learn more about why KSS doesn’t pass our bar.

Radian Group (RDN)

Trailing 12-Month GAAP Operating Margin: 64.3%

Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.

Why Does RDN Fall Short?

1. Annual sales declines of 2.3% for the past five years show its products and services struggled to connect with the market during this cycle
2. 3.2% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
3. Earnings per share lagged its peers over the last two years as they only grew by 3.9% annually

At $33.02 per share, Radian Group trades at 0.8x forward P/B. Read our free research report to see why you should think twice about including RDN in your portfolio.

One Stock to Buy:

Dutch Bros (BROS)

Trailing 12-Month GAAP Operating Margin: 9.8%

Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE: BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Why Are We Backing BROS?

1. Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
2. Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
3. Notable projected revenue growth of 25% for the next 12 months hints at market share gains

Dutch Bros is trading at $50.54 per share, or 56.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

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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.