Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 are three profitable companies to steer clear of and a few better alternatives.
TEGNA (TGNA)
Trailing 12-Month GAAP Operating Margin: 24.7%
Spun out of Gannett in 2015, TEGNA (NYSE: TGNA) is a media company operating a network of television stations and digital platforms, focusing on local news and community content.
Why Do We Pass on TGNA?
- Products and services aren't resonating with the market as its revenue declined by 2.8% annually over the last two years
- Forecasted revenue decline of 9% for the upcoming 12 months implies demand will fall even further
- Free cash flow margin is forecasted to shrink by 8.8 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
At $16.64 per share, TEGNA trades at 8x forward P/E. To fully understand why you should be careful with TGNA, check out our full research report (it’s free).
Greenbrier (GBX)
Trailing 12-Month GAAP Operating Margin: 11.2%
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE: GBX) supplies the freight rail transportation industry with railcars and related services.
Why Should You Dump GBX?
- Sales tumbled by 1.7% annually over the last two years, showing market trends are working against its favor during this cycle
- High input costs result in an inferior gross margin of 13.3% that must be offset through higher volumes
- Free cash flow margin dropped by 12 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Greenbrier is trading at $45.68 per share, or 6.7x forward EV-to-EBITDA. If you’re considering GBX for your portfolio, see our FREE research report to learn more.
Helios (HLIO)
Trailing 12-Month GAAP Operating Margin: 9.9%
Founded on the principle of treating others as one wants to be treated, Helios (NYSE: HLIO) designs, manufactures, and sells motion and electronic control components for various sectors.
Why Should You Sell HLIO?
- 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
- Projected sales decline of 1.6% over the next 12 months indicates demand will continue deteriorating
- Earnings per share fell by 2.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Helios’s stock price of $31.77 implies a valuation ratio of 13.8x forward P/E. Read our free research report to see why you should think twice about including HLIO in your portfolio.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum 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
