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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that leverages its financial strength to beat the competition and two that may face some trouble.
Two Stocks to Sell:
GEO Group (GEO)
Trailing 12-Month GAAP Operating Margin: 10.5%
With a global footprint spanning three continents and approximately 81,000 beds across 100 facilities, GEO Group (NYSE: GEO) operates secure facilities, processing centers, and reentry services for government agencies in the United States, Australia, and South Africa.
Why Is GEO Not Exciting?
- Sales trends were unexciting over the last five years as its 3.3% annual growth was below the typical business services company
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 4 percentage points
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 11.1 percentage points
GEO Group is trading at $23.55 per share, or 1x forward price-to-sales. If you’re considering GEO for your portfolio, see our FREE research report to learn more.
Expro (XPRO)
Trailing 12-Month GAAP Operating Margin: 4.7%
Operating in over 50 countries from deepwater offshore platforms to remote onshore fields, Expro (NYSE: XPRO) provides equipment and services that help oil and gas companies drill wells, measure production, and maintain well integrity.
Why Does XPRO Give Us Pause?
- Smaller revenue base of $1.58 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Costly operations and weak unit economics result in an inferior gross margin of 20% that must be offset through higher production volumes
- Poor free cash flow margin of 1.3% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Expro’s stock price of $16.65 implies a valuation ratio of 17.3x forward P/E. To fully understand why you should be careful with XPRO, check out our full research report (it’s free).
One Stock to Buy:
Nvidia (NVDA)
Trailing 12-Month GAAP Operating Margin: 64%
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Are We Bullish on NVDA?
- Annual revenue growth of 78.3% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- NVDA is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
At $214.28 per share, Nvidia trades at 22x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI 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%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. 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 ServiceNow (+163% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
