Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 that may face some trouble.
Two Stocks to Sell:
Domino's (DPZ)
Trailing 12-Month GAAP Operating Margin: 19.2%
Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Are We Hesitant About DPZ?
- Lackluster 5.3% annual revenue growth over the last six years indicates the company is losing ground to competitors
- Projected sales growth of 5.3% for the next 12 months suggests sluggish demand
At $404.27 per share, Domino's trades at 21.4x forward P/E. Check out our free in-depth research report to learn more about why DPZ doesn’t pass our bar.
Regal Rexnord (RRX)
Trailing 12-Month GAAP Operating Margin: 11%
Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.
Why Are We Wary of RRX?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Flat earnings per share over the last two years underperformed the sector average
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
Regal Rexnord is trading at $158.81 per share, or 15.2x forward P/E. If you’re considering RRX for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Lululemon (LULU)
Trailing 12-Month GAAP Operating Margin: 22%
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Are We Backing LULU?
- Comparable store sales rose by 3.8% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Collection of products is difficult to replicate at scale and results in a best-in-class gross margin of 58.6%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Lululemon’s stock price of $194.41 implies a valuation ratio of 15.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
