Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.

Two Stocks to Sell:

RH (RH)

Trailing 12-Month GAAP Operating Margin: 10.7%

Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.

Why Do We Think Twice About RH?

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. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

RH is trading at $202.29 per share, or 15.6x forward P/E. To fully understand why you should be careful with RH, check out our full research report (it’s free).

Polaris (PII)

Trailing 12-Month GAAP Operating Margin: 1.9%

Founded in 1954, Polaris (NYSE: PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.

Why Should You Dump PII?

1. Products and services aren't resonating with the market as its revenue declined by 13% annually over the last two years
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 25.6% annually
3. Eroding returns on capital suggest its historical profit centers are aging

Polaris’s stock price of $58.13 implies a valuation ratio of 7.9x forward EV-to-EBITDA. If you’re considering PII for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Houlihan Lokey (HLI)

Trailing 12-Month GAAP Operating Margin: 20%

Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.

Why Are We Bullish on HLI?

1. Market share has increased this cycle as its 17.2% annual revenue growth over the last five years was exceptional
2. Additional sales over the last two years increased its profitability as the 29% annual growth in its earnings per share outpaced its revenue
3. Balance sheet strength has increased this cycle as its 43.7% annual tangible book value per share growth over the last two years was exceptional

At $205.32 per share, Houlihan Lokey trades at 26.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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 6 Stocks for this week. 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-micro-cap company Kadant (+351% 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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