Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 balances growth and profitability and two that may face some trouble.
Two Stocks to Sell:
Danaher (DHR)
Trailing 12-Month GAAP Operating Margin: 20.4%
Born from a real estate investment trust that transformed into a manufacturing powerhouse, Danaher (NYSE: DHR) is a global science and technology company that provides specialized equipment, software, and services for biotechnology, life sciences, and diagnostics.
Why Does DHR Fall Short?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 7.8 percentage points
- Earnings per share fell by 1.6% annually over the last five years while its revenue was flat, showing each sale was less profitable
Danaher’s stock price of $219.25 implies a valuation ratio of 24.4x forward P/E. Read our free research report to see why you should think twice about including DHR in your portfolio.
T. Rowe Price (TROW)
Trailing 12-Month GAAP Operating Margin: 30.6%
Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ: TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.
Why Is TROW Not Exciting?
- Muted 1.5% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.5% annually while its revenue grew
T. Rowe Price is trading at $112.04 per share, or 11x forward P/E. Check out our free in-depth research report to learn more about why TROW doesn’t pass our bar.
One Stock to Buy:
SPX Technologies (SPXC)
Trailing 12-Month GAAP Operating Margin: 16.2%
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Are We Bullish on SPXC?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 22.1% outpaced its revenue gains
- Free cash flow margin expanded by 11.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $207.75 per share, SPX Technologies trades at 22.1x forward P/E. 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 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
