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.
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 balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
Salesforce (CRM)
Trailing 12-Month GAAP Operating Margin: 20.1%
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Are We Wary of CRM?
- Customers were hesitant to make long-term commitments to its software as its 10.3% average ARR growth over the last year was sluggish
- Anticipated sales growth of 11% for the next year implies demand will be shaky
- Operating margin expanded by 1 percentage points over the last year as it scaled and became more efficient
Salesforce’s stock price of $167.88 implies a valuation ratio of 3.4x forward price-to-sales. Check out our free in-depth research report to learn more about why CRM doesn’t pass our bar.
Two Stocks to Watch:
Parker-Hannifin (PH)
Trailing 12-Month GAAP Operating Margin: 20.9%
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Are We Fans of PH?
- Healthy operating margin of 18.7% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs
- Share repurchases over the last five years enabled its annual earnings per share growth of 18.5% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
At $881 per share, Parker-Hannifin trades at 26.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Acuity Brands (AYI)
Trailing 12-Month GAAP Operating Margin: 13.4%
One of the pioneers of smart lights, Acuity (NYSE: AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Are We Positive On AYI?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.1% annual sales growth over the last two years
- Offerings are mission-critical for businesses and lead to a best-in-class gross margin of 45.1%
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Acuity Brands is trading at $289.34 per share, or 14x forward P/E. Is now a good time to buy? 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 meeting near-term momentum - both boxes checked at the same time.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
