Nasdaq
华尔街日报1 Profitable Stock to Own for Decades and 2 We Ignore
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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:
Dropbox (DBX)
Trailing 12-Month GAAP Operating Margin: 24.3%
Originally named after the founders' tendency to "drop" files into a shared folder, Dropbox (NASDAQ:DBX) provides a content collaboration platform that helps individuals and teams store, organize, share, and work on files from anywhere.
Why Do We Think DBX Will Underperform?
- Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
- Forecasted revenue decline of 1.3% for the upcoming 12 months implies demand will fall off a cliff
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 1.9 percentage points
At $28.65 per share, Dropbox trades at 3x forward price-to-sales. Read our free research report to see why you should think twice about including DBX in your portfolio.
Trimble (TRMB)
Trailing 12-Month GAAP Operating Margin: 15.3%
Playing a role in the construction of the Paris Grand, Trimble (NASDAQ:TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.
Why Do We Avoid TRMB?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin dropped by 12 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Trimble is trading at $80.89 per share, or 23.6x forward P/E. If you’re considering TRMB for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
NMI Holdings (NMIH)
Trailing 12-Month GAAP Operating Margin: 74.8%
Founded in the aftermath of the 2008 housing crisis to bring new capacity to the mortgage insurance market, NMI Holdings (NASDAQ:NMIH) provides mortgage insurance that protects lenders against losses when homebuyers default on their mortgage loans.
Why Is NMIH a Top Pick?
- Steady 9.2% annualized growth in net premiums earned over the last two years shows its insurance offerings are gaining traction
- Underwriting operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Balance sheet strength has increased this cycle as its 16.2% annual book value per share growth over the last five years was exceptional
NMI Holdings’s stock price of $41.03 implies a valuation ratio of 1.2x forward P/B. Is now a good time to buy? Find out 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 6 Stocks for this week. 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).
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