3 Profitable Stocks in Dangerous Territory
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 three profitable companies that don't make the cut and some better opportunities instead.
Trailing 12-Month GAAP Operating Margin: 1.3%
Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE:GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.
Why Should You Dump GME?
Products have few die-hard fans as sales have declined by 12.3% annually over the last six years
Sales are projected to tank by 6% over the next 12 months as its demand continues evaporating
Negative returns on capital show that some of its growth strategies have backfired
GameStop's stock price of $23.44 implies a valuation ratio of 47.1x forward P/E. Check out our free in-depth research report to learn more about why GME doesn't pass our bar.
Trailing 12-Month GAAP Operating Margin: 3.3%
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Why Do We Think VSTS Will Underperform?
Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
Earnings per share have dipped by 33% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Free cash flow margin dropped by 6 percentage points over the last four years, implying the company became more capital intensive as competition picked up
Vestis is trading at $6.10 per share, or 7.7x forward P/E. To fully understand why you should be careful with VSTS, check out our full research report (it's free).
Trailing 12-Month GAAP Operating Margin: 12.3%
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Should You Sell GPK?
Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
Earnings per share have contracted by 5.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.8 percentage points
At $21.20 per share, Graphic Packaging Holding trades at 8.6x forward P/E. If you're considering GPK for your portfolio, see our FREE research report to learn 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 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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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We're kind of used to being in the contact. I think that's how it's supposed to be. Good rivalry.' GO FURTHER Nuggets waste Nikola Jokić's career night in inexplicable loss to woeful Wizards New Knicks signee Guerschon Yabusele is a good player and a good fit that fills a need. He can play the 5 and run next to Karl-Anthony Towns or Mitchell Robinson. Opponents need to guard him beyond the arc. I'm not obsessed with the second-year player option, given the Knicks' potential 2026-27 payroll. But sometimes that's the cost of doing business for a good player. Isaiah J. Downing / Imagn While everyone else is focused on the Bucks right now, the Dario Sarić for Jonas Valančiūnas trade is an absolutely incredible deal for the Denver Nuggets. They just traded $5 million in dead weight to the Sacramento Kings to get the best backup center of the Nikola Jokić era. Denver now is $2.4 million below the luxury tax line with at least on roster spot to fill. If that spot is a veteran minimum deal for $2.3 million, they will just barely stay under the tax and avoid the repeater penalty this year. Isaiah J. Downing / Imagn The Denver Nuggets have acquired Jonas Valančiūnas from the Sacramento Kings in exchange for Dario Sarić, team sources confirmed to The Athletic. The Nuggets have had an incredible two days. Getty Images The Bucks made two moves that make sense individually but also raise an eyebrow when looked at collectively. They will pay Myles Turner an average of nearly $27 million per season and will get an above-average starting center for that contract who fits well on a Giannis Antetokounmpo team and should be a very capable replacement for Brook Lopez. They will also stretch-waive Damian Lillard, which means the Bucks will have a $22,516,574 cap charge on their books for each of the next five season. That makes sense too since he was essentially going to be an empty $54.13 million cap hit next season as he rehabbed from a torn Achilles. The last season of that contract was unlikely to be very productive either since he would be 36 and returning in his first season from that injury. The Bucks clearly want to remain competitive next season with Antetokounmpo and that makes sense too since they want to take advantage of his prime, let alone any concerns about losing him down the line. Still, they will now effectively be spending $49 million per season for the last two years on Turner's deal, and have another year of $22.5 million on the books after that. That could be about 12 percent (or more) of the cap in the 2027-28 season, which is more than a nontaxpayer midlevel exception would earn. We shall see if this set of moves will be worth it. Getty Images This is why I criticized the Pacers for taking Andrew Nembhard's salary from $2 million to $18 million for 2025-26 when they didn't have to in his extension last summer. It set the Pacers up to be way into the luxury tax, and you know when it came down to it that Indiana would blink rather than pay it. Keeping Myles Turner on the books for this year at $24 million would have been no sweat if Nembhard was still on his cheap rookie deal, but the Pacers turned the final year of it into a much bigger salary. That extension looked extravagant at the time — $56 million in new money for just two years — and despite Nembhard's playoff heroics, the Pacers are paying the price for it now. GO FURTHER The NBA offseason's most under-scrutinized moves, from Immanuel Quickley to Max Christie One thing you gotta hand to the Bucks: Any time it seems they need to operate with urgency to show a multi-time MVP they're trying to build a contender, they do it. Page 2
