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 are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Walmart (WMT)
Trailing 12-Month GAAP Operating Margin: 4.4%
Known for its large-format Supercenters, Walmart (NASDAQ: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Does WMT Fall Short?
- Annual sales growth of 5.3% over the last three years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Gross margin of 24.9% is an output of its commoditized inventory
- Operating margin of 4.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
At $107.51 per share, Walmart trades at 36.8x forward P/E. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.
Two Stocks to Watch:
Tradeweb Markets (TW)
Trailing 12-Month GAAP Operating Margin: 43.7%
Founded in 1996 as one of the pioneers in electronic bond trading, Tradeweb Markets (NASDAQ: TW) builds and operates electronic marketplaces that connect financial institutions for trading across rates, credit, equities, and money markets.
What Makes TW Stand Out?
- Market share has increased this cycle as its 20.8% annual revenue growth over the last two years was exceptional
- Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 21% outpaced its revenue gains
Tradeweb Markets’s stock price of $101.16 implies a valuation ratio of 23.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Noble Corporation (NE)
Trailing 12-Month GAAP Operating Margin: 11.4%
With origins dating back over a century to 1921, Noble Corporation (NYSE: NE) operates drilling rigs that oil and gas companies charter to drill wells in deep ocean waters and shallow seas.
Why Is NE Interesting?
- Annual revenue growth of 29.7% over the past five years was outstanding, reflecting market share gains this cycle
- Economies of scale give it some operating leverage when demand rises
- EBITDA margin improvement of 15.3 percentage points over the last five years demonstrates its ability to scale efficiently
Noble Corporation is trading at $43.73 per share, or 55.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
