A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
Cracker Barrel (CBRL)
Trailing 12-Month GAAP Operating Margin: 2.1%
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ: CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
Why Should You Sell CBRL?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Projected sales are flat for the next 12 months, implying demand will slow from its six-year trend
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $61.58 per share, Cracker Barrel trades at 21.8x forward P/E. To fully understand why you should be careful with CBRL, check out our full research report (it’s free).
Two Stocks to Watch:
Paycom (PAYC)
Trailing 12-Month GAAP Operating Margin: 27.9%
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE: PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Why Could PAYC Be a Winner?
- Prominent and differentiated software leads to a best-in-class gross margin of 85.9%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Excellent operating margin of 27.9% highlights the efficiency of its business model
Paycom is trading at $223 per share, or 6x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
DoubleVerify (DV)
Trailing 12-Month GAAP Operating Margin: 12.1%
When Oren Netzer saw a digital ad for US-based Target while sitting in his Tel Aviv apartment, he knew there was an unsolved problem, so he started DoubleVerify (NYSE: DV), a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.
Why Do We Like DV?
- Superior software functionality and low servicing costs result in a stellar gross margin of 82.3%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 12.1%
DoubleVerify’s stock price of $14.64 implies a valuation ratio of 3.3x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking 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 Tecnoglass (+1,754% 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
