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. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.

Two Stocks to Sell:

FedEx (FDX)

Trailing 12-Month GAAP Operating Margin: 6.2%

Sporting one of the largest air cargo fleets in the world, FedEx (NYSE: FDX) is a global provider of parcel and cargo delivery services.

Why Do We Think FDX Will Underperform?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.5% over the last two years was below our standards for the industrials sector
2. Poor free cash flow margin of 2.4% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $412.00 per share, FedEx trades at 18.9x forward P/E. Read our free research report to see why you should think twice about including FDX in your portfolio.

Core Laboratories (CLB)

Trailing 12-Month GAAP Operating Margin: 8.7%

With roots dating back to the first commercial oil boom, Core Laboratories (NYSE: CLB) analyzes rock and fluid samples from oil and gas reservoirs to help energy companies optimize production and recovery.

Why Should You Dump CLB?

1. Sales trends were unexciting over the last five years as its 3.4% annual growth was below the typical energy upstream and integrated energy company
2. Modest revenue base of $524.7 million gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Gross margin of 20.4% is below its competitors, leaving less money to invest in exploration and production

Core Laboratories is trading at $14.00 per share, or 1.3x forward price-to-sales. Check out our free in-depth research report to learn more about why CLB doesn’t pass our bar.

One Stock to Buy:

Palantir Technologies (PLTR)

Trailing 12-Month GAAP Operating Margin: 38.1%

Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ: PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.

Why Will PLTR Outperform?

1. Average billings growth of 67.6% over the last year enhances its liquidity and shows there is steady demand for its products
2. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
3. PLTR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

Palantir Technologies’s stock price of $132.89 implies a valuation ratio of 41.1x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.

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.