Nasdaq
華爾街日報1 Profitable Stock for Long-Term Investors and 2 That Underwhelm
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. 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:
Paylocity (PCTY)
Trailing 12-Month GAAP Operating Margin: 19.1%
Operating in a field where companies traditionally juggled multiple disconnected systems, Paylocity (NASDAQ:PCTY) provides cloud-based human capital management and payroll software solutions that help businesses manage their workforce and HR processes.
Why Do We Think Twice About PCTY?
- Underwhelming ARR growth of 14.7% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its two-year trend
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Paylocity is trading at $150.87 per share, or 4.8x forward price-to-sales. If you’re considering PCTY for your portfolio, see our FREE research report to learn more.
Douglas Dynamics (PLOW)
Trailing 12-Month GAAP Operating Margin: 10.9%
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Are We Hesitant About PLOW?
- Sales trends were unexciting over the last two years as its 1.8% annual growth was below the typical industrials company
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.2 percentage points
- Waning returns on capital imply its previous profit engines are losing steam
Douglas Dynamics’s stock price of $34.14 implies a valuation ratio of 14.5x forward P/E. To fully understand why you should be careful with PLOW, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
PayPal (PYPL)
Trailing 12-Month GAAP Operating Margin: 18.2%
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ:PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Why Do We Like PYPL?
- Share buybacks propelled its annual earnings per share growth to 19.4%, which outperformed its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $61.62 per share, PayPal trades at 11x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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