Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 leverages its financial strength to beat the competition and two that may struggle to keep up.

Two Stocks to Sell:

Illumina (ILMN)

Trailing 12-Month GAAP Operating Margin: 18.2%

Pioneering the ability to read the human genome at unprecedented speed and affordability, Illumina (NASDAQ: ILMN) develops and sells advanced DNA sequencing and microarray technologies that allow researchers and clinicians to analyze genetic variations and functions.

Why Does ILMN Worry Us?

1. 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
2. Issuance of new shares over the last five years caused its earnings per share to fall by 2.2% annually while its revenue grew
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Illumina is trading at $120.38 per share, or 24.9x forward P/E. Dive into our free research report to see why there are better opportunities than ILMN.

Waters Corporation (WAT)

Trailing 12-Month GAAP Operating Margin: 26.5%

Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE: WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.

Why Does WAT Give Us Pause?

1. Sales trends were unexciting over the last two years as its 1.8% annual growth was below the typical healthcare company
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Eroding returns on capital suggest its historical profit centers are aging

At $371.95 per share, Waters Corporation trades at 26.6x forward P/E. To fully understand why you should be careful with WAT, check out our full research report (it’s free for active Edge members).

One Stock to Watch:

Match Group (MTCH)

Trailing 12-Month GAAP Operating Margin: 23.4%

Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.

Why Do We Like MTCH?

1. Customers are spending more money on its platform as its average revenue per user has increased by 7.9% annually over the last two years
2. Highly efficient business model is illustrated by its impressive 35.7% EBITDA margin
3. MTCH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy

Match Group’s stock price of $32.83 implies a valuation ratio of 6.3x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.