Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
LifeStance Health Group (LFST)
Trailing 12-Month GAAP Operating Margin: 3%
With over 6,600 licensed mental health professionals treating more than 880,000 patients annually, LifeStance Health (NASDAQ: LFST) provides outpatient mental health services through a network of clinicians offering psychiatric evaluations, psychological testing, and therapy across 33 states.
Why Are We Hesitant About LFST?
- Subscale operations are evident in its revenue base of $1.49 billion, meaning it has fewer distribution channels than its larger rivals
- Poor free cash flow margin of 0.9% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Negative returns on capital show management lost money while trying to expand the business
At $8.98 per share, LifeStance Health Group trades at 27.2x forward P/E. To fully understand why you should be careful with LFST, check out our full research report (it’s free).
Two Stocks to Watch:
Vulcan Materials (VMC)
Trailing 12-Month GAAP Operating Margin: 20.6%
Founded in 1909, Vulcan Materials (NYSE: VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Why Are We Fans of VMC?
- Impressive 10.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Free cash flow margin expanded by 5.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Vulcan Materials’s stock price of $290.53 implies a valuation ratio of 32.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Visa (V)
Trailing 12-Month GAAP Operating Margin: 61.1%
Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE: V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.
Why Is V a Top Pick?
- Annual revenue growth of 15% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 20.1% exceeded its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Visa is trading at $328.50 per share, or 23.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
