Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here are two profitable companies that generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Donnelley Financial Solutions (DFIN)
Trailing 12-Month GAAP Operating Margin: 19.4%
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE: DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Why Does DFIN Worry Us?
- Sales tumbled by 3.4% annually over the last five years, showing market trends are working against it during this cycle
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 8.4% annually
Donnelley Financial Solutions is trading at $48.67 per share, or 1.6x forward price-to-sales. Check out our free in-depth research report to learn more about why DFIN doesn’t pass our bar.
Two Stocks to Watch:
Upwork (UPWK)
Trailing 12-Month GAAP Operating Margin: 15.6%
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Could UPWK Be a Winner?
- Monetization efforts are paying off as its average revenue per customer has grown by 10.1% annually over the last two years
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 239% outpaced its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
Upwork’s stock price of $9.17 implies a valuation ratio of 3.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Armstrong World (AWI)
Trailing 12-Month GAAP Operating Margin: 25.9%
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 Are We Bullish on AWI?
- Annual revenue growth of 12.1% over the last two years was superb and indicates its market share increased during this cycle
- Highly efficient business model is illustrated by its impressive 24.9% operating margin, and its operating leverage amplified its profits over the last five years
- Free cash flow margin jumped by 5.2 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $155.94 per share, Armstrong World trades at 18.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
