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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Akamai Technologies (AKAM)
Trailing 12-Month GAAP Operating Margin: 12.9%
With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ: AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online.
Why Should You Dump AKAM?
- 5.6% annual revenue growth over the last two years was slower than its software peers
- Gross margin of 59.1% reflects its high servicing costs
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
At $75.85 per share, Akamai Technologies trades at 2.6x forward price-to-sales. Check out our free in-depth research report to learn more about why AKAM doesn’t pass our bar.
T. Rowe Price (TROW)
Trailing 12-Month GAAP Operating Margin: 31.6%
Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ: TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.
Why Does TROW Fall Short?
- Sales trends were unexciting over the last five years as its 4.3% annual growth was below the typical financials company
- Performance over the past five years shows its incremental sales were less profitable, as its 1.3% annual earnings per share growth trailed its revenue gains
T. Rowe Price is trading at $101.07 per share, or 11.1x forward P/E. Dive into our free research report to see why there are better opportunities than TROW.
One Stock to Buy:
Armstrong World (AWI)
Trailing 12-Month GAAP Operating Margin: 26.6%
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Why Should You Buy AWI?
- Impressive 11.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 24.7%, and it turbocharged its profits by achieving some fixed cost leverage
- Share repurchases over the last two years enabled its annual earnings per share growth of 19.5% to outpace its revenue gains
Armstrong World’s stock price of $196.02 implies a valuation ratio of 26.4x forward P/E. 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
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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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