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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that balance growth and profitability and one that may struggle to keep up.
One Stock to Sell:
Okta (OKTA)
Trailing 12-Month GAAP Operating Margin: 3.9%
Named after the meteorological measurement for cloud cover, Okta (NASDAQ: OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Why Do We Think Twice About OKTA?
- Average billings growth of 10.2% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 9.2% for the next 12 months implies demand will slow from its two-year trend
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.8 percentage points
Okta is trading at $85.74 per share, or 5.2x forward price-to-sales. If you’re considering OKTA for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Airbnb (ABNB)
Trailing 12-Month GAAP Operating Margin: 22.6%
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Are We Backing ABNB?
- Nights and Experiences Booked have grown by 9.4% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Highly efficient business model is illustrated by its impressive 36.4% EBITDA margin, and its operating leverage amplified its profits over the last few years
- Robust free cash flow margin of 37.8% gives it many options for capital deployment
Airbnb’s stock price of $120.96 implies a valuation ratio of 16.1x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Molina Healthcare (MOH)
Trailing 12-Month GAAP Operating Margin: 3%
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Could MOH Be a Winner?
- Market share has increased this cycle as its 19.3% annual revenue growth over the last five years was exceptional
- Scale advantages are evident in its $44.55 billion revenue base, which provides operating leverage when demand is strong
- Earnings per share have grown at a respectable 5.8% annual rate over the last five years, a bit better than the industry average
At $150.11 per share, Molina Healthcare trades at 12.3x forward P/E. 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
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 Kadant (+351% 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
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