While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies — as Jeff Bezos said, “Your margin is my opportunity”.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one best left off your watchlist.
One Stock to Sell:
Privia Health (PRVA)
Trailing 12-Month GAAP Operating Margin: 1.9%
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ: PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Why Does PRVA Worry Us?
- Revenue base of $2.36 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.7% for the last five years
- Negative returns on capital show management lost money while trying to expand the business
At $22.51 per share, Privia Health trades at 20.5x forward P/E. Check out our free in-depth research report to learn more about why PRVA doesn’t pass our bar.
Two Stocks to Buy:
Blackstone (BX)
Trailing 12-Month GAAP Operating Margin: 59.4%
With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE: BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.
Why Will BX Beat the Market?
- Impressive 21.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Additional sales over the last two years increased its profitability as the 24.2% annual growth in its earnings per share outpaced its revenue
Blackstone’s stock price of $106.71 implies a valuation ratio of 17.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
SM Energy (SM)
Trailing 12-Month GAAP Operating Margin: 29.6%
Operating across three key regions with over 328,000 net acres under its control, SM Energy (NYSE: SM) explores for, develops, and produces oil, natural gas, and natural gas liquids primarily from shale formations in Texas and Utah.
What Makes SM Stand Out?
- Annual revenue growth of 16.7% over the past ten years was outstanding, reflecting market share gains this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 86.8%
- Strong free cash flow margin of 19.4% enables it to reinvest or return capital consistently
SM Energy is trading at $39.40 per share, or 4.6x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
