Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
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 leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Wynn Resorts (WYNN)
Trailing 12-Month GAAP Operating Margin: 17%
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ: WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Why Are We Out on WYNN?
- 18.3% annual revenue growth over the last five years was slower than its consumer discretionary peers
- Poor free cash flow margin of 12.1% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- 5× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Wynn Resorts’s stock price of $121.03 implies a valuation ratio of 21.3x forward P/E. Read our free research report to see why you should think twice about including WYNN in your portfolio.
Johnson Controls (JCI)
Trailing 12-Month GAAP Operating Margin: 9.7%
Founded after patenting the electric room thermostat, Johnson Controls (NYSE: JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.
Why Are We Wary of JCI?
- 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
- Earnings per share lagged its peers over the last two years as they only grew by 3.8% annually
- ROIC of 7.2% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
At $120.52 per share, Johnson Controls trades at 26.1x forward P/E. Dive into our free research report to see why there are better opportunities than JCI.
One Stock to Buy:
The Trade Desk (TTD)
Trailing 12-Month GAAP Operating Margin: 18.9%
Built as an alternative to "walled garden" advertising ecosystems, The Trade Desk (NASDAQ: TTD) provides a cloud-based platform that helps advertisers and agencies plan, manage, and optimize digital advertising campaigns across multiple channels and devices.
Why Will TTD Beat the Market?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 20.1% over the last year
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- Highly efficient business model is illustrated by its impressive 18.9% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
The Trade Desk is trading at $37.94 per share, or 5.9x forward price-to-sales. 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
Check out the high-quality names we’ve flagged 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-small-cap company Exlservice (+354% 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.
