While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies — as Jeff Bezos said, “Your margin is my opportunity”.
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 balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
AMN Healthcare Services (AMN)
Trailing 12-Month GAAP Operating Margin: 5.8%
With a network of thousands of healthcare professionals ranging from nurses to physicians to executives, AMN Healthcare (NYSE:AMN) provides healthcare workforce solutions including temporary staffing, permanent placement, and technology platforms for hospitals and healthcare facilities across the United States.
Why Do We Think Twice About AMN?
- Declining travelers on assignment over the past two years imply it may need to invest in improvements to get back on track
- Earnings per share have contracted by 7.6% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
AMN Healthcare Services’s stock price of $36.72 implies a valuation ratio of 43.4x forward P/E. Read our free research report to see why you should think twice about including AMN in your portfolio.
Two Stocks to Watch:
Sterling (STRL)
Trailing 12-Month GAAP Operating Margin: 18.1%
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.
Why Is STRL a Good Business?
- Market share has increased this cycle as its 28.9% annual revenue growth over the last two years was exceptional
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
- Improving returns on capital reflect management’s ability to monetize investments
Sterling is trading at $568.38 per share, or 23.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Littelfuse (LFUS)
Trailing 12-Month GAAP Operating Margin: 3.7%
The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ:LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.
Why Are We Fans of LFUS?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 18.3%
- Earnings per share grew by 22.8% annually over the last two years, massively outpacing its peers
- Robust free cash flow margin of 14.5% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
At $454.59 per share, Littelfuse trades at 23.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.