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.
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 generate reliable profits without sacrificing growth and one best left off your watchlist.
One Stock to Sell:
Yelp (YELP)
Trailing 12-Month GAAP Operating Margin: 12.4%
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE:YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Why Do We Think Twice About YELP?
- 6.1% annual revenue growth over the last three years was slower than its consumer internet peers
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $26.29 per share, Yelp trades at 5.3x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than YELP.
Two Stocks to Buy:
Affiliated Managers Group (AMG)
Trailing 12-Month GAAP Operating Margin: 21.5%
Using a partnership approach that preserves entrepreneurial culture at its portfolio companies, Affiliated Managers Group (NYSE:AMG) is an investment firm that acquires stakes in boutique asset management companies while allowing them to maintain operational independence.
Why Is AMG a Good Business?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 23.7% exceeded its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Affiliated Managers Group is trading at $370.13 per share, or 9.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
NerdWallet (NRDS)
Trailing 12-Month GAAP Operating Margin: 10.9%
Born from founder Tim Chen's frustration with the lack of transparent credit card information when helping his sister in 2009, NerdWallet (NASDAQ:NRDS) is a digital platform that provides financial guidance to help consumers and small businesses make smarter decisions about credit cards, loans, insurance, and other financial products.
Why Are We Bullish on NRDS?
- Market share has increased this cycle as its 28.2% annual revenue growth over the last five years was exceptional
- Share buybacks catapulted its annual earnings per share growth to 186%, which outperformed its revenue gains over the last two years
NerdWallet’s stock price of $9.00 implies a valuation ratio of 1.7x forward P/B. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.