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3 Profitable Stocks We Think Twice About
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”.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are three profitable companies that don’t make the cut and some better opportunities instead.
Expedia (EXPE)
Trailing 12-Month GAAP Operating Margin: 16%
Originally founded as a part of Microsoft, Expedia (NASDAQ:EXPE) is one of the world’s leading online travel agencies.
Why Does EXPE Fall Short?
- Decision to emphasize platform growth over monetization has contributed to sluggish trends in its average revenue per booking
- Estimated sales growth of 6.4% for the next 12 months implies demand will slow from its three-year trend
- Excessive marketing spend signals little organic demand and traction for its platform
At $259.21 per share, Expedia trades at 7x forward EV/EBITDA. Read our free research report to see why you should think twice about including EXPE in your portfolio.
Pangaea (PANL)
Trailing 12-Month GAAP Operating Margin: 8.9%
Established in 1996, Pangaea Logistics (NASDAQ:PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.
Why Are We Wary of PANL?
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 19.8%
- Efficiency has decreased over the last five years as its operating margin fell by 4.9 percentage points
- Earnings per share have dipped by 23.4% annually over the past four years, which is concerning because stock prices follow EPS over the long term
Pangaea’s stock price of $8.26 implies a valuation ratio of 9.2x forward P/E. Dive into our free research report to see why there are better opportunities than PANL.
Stanley Black & Decker (SWK)
Trailing 12-Month GAAP Operating Margin: 9.4%
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Why Should You Sell SWK?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings per share have dipped by 15.9% annually over the past five years, which is concerning because stock prices follow EPS over the long term
Stanley Black & Decker is trading at $90.12 per share, or 15.8x forward P/E. To fully understand why you should be careful with SWK, check out our full research report (it’s free).
Stocks We Like 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.