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Yahoo
13-06-2025
- Business
- Yahoo
1 Profitable Stock with Exciting Potential and 2 to Avoid
A company with profits isn't always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential. Profits are valuable, but they're not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble. Trailing 12-Month GAAP Operating Margin: 6.2% A treasure hunt because there's no guarantee of consistent product selection, Dollar Tree (NASDAQ:DLTR) is a discount retailer that sells general merchandise and select packaged food at extremely low prices. Why Are We Cautious About DLTR? Annual sales growth of 1.1% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand Estimated sales decline of 21.7% for the next 12 months implies a challenging demand environment Underwhelming 9.8% return on capital reflects management's difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam At $96 per share, Dollar Tree trades at 17.8x forward P/E. Read our free research report to see why you should think twice about including DLTR in your portfolio, it's free. Trailing 12-Month GAAP Operating Margin: 21.1% Founded in 1978 and pioneering treatments for some of medicine's most complex challenges, Biogen (NASDAQ:BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer's disease, spinal muscular atrophy, and rare diseases. Why Does BIIB Worry Us? Sales tumbled by 7.4% annually over the last five years, showing market trends are working against its favor during this cycle Forecasted revenue decline of 6.9% for the upcoming 12 months implies demand will fall even further Sales were less profitable over the last five years as its earnings per share fell by 15.1% annually, worse than its revenue declines Biogen's stock price of $131.01 implies a valuation ratio of 8.2x forward P/E. To fully understand why you should be careful with BIIB, check out our full research report (it's free). Trailing 12-Month GAAP Operating Margin: 11.8% 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 Are We Fans of YELP? Prominent and differentiated platform culminates in a best-in-class gross margin of 91.2% Healthy EBITDA margin of 25.7% shows it's a well-run company with efficient processes, and its rise over the last few years was fueled by some leverage on its fixed costs YELP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute Yelp is trading at $35.82 per share, or 6.7x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free. 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 6 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-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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
1 Russell 2000 Stock with Exciting Potential and 2 to Approach with Caution
The Russell 2000 (^RUT) is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial. The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we're here to guide you toward the right ones. Keeping that in mind, here is one Russell 2000 stock that could be the next big thing and two best left off your watchlist. Market Cap: $343.1 million Started as a small grocery store in New York City, B&G Foods (NYSE:BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands. Why Should You Dump BGS? Products have few die-hard fans as sales have declined by 3.3% annually over the last three years Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 30.7% annually, worse than its revenue 7× net-debt-to-EBITDA ratio shows it's overleveraged and increases the probability of shareholder dilution if things turn unexpectedly B&G Foods's stock price of $4.38 implies a valuation ratio of 6.1x forward P/E. If you're considering BGS for your portfolio, see our FREE research report to learn more. Market Cap: $345.1 million Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ:PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness. Why Do We Pass on PACB? 6.6% annual revenue growth over the last two years was slower than its healthcare peers Free cash flow margin dropped by 29.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up Short cash runway increases the probability of a capital raise that dilutes existing shareholders At $1.13 per share, PacBio trades at 2.1x forward price-to-sales. Read our free research report to see why you should think twice about including PACB in your portfolio, it's free. Market Cap: $2.59 billion 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 Are We Positive On YELP? Platform is difficult to replicate at scale and results in a best-in-class gross margin of 91.2% Highly efficient business model is illustrated by its impressive 25.7% EBITDA margin, and its rise over the last few years was fueled by some leverage on its fixed costs Share repurchases have amplified shareholder returns as its annual earnings per share growth of 24.7% exceeded its revenue gains over the last three years Yelp is trading at $40.25 per share, or 7.5x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it's free. 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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
Yahoo
15-04-2025
- Business
- Yahoo
Yelp (YELP): Buy, Sell, or Hold Post Q4 Earnings?
Since October 2024, Yelp has been in a holding pattern, posting a small loss of 3.5% while floating around $33.68. Given the underwhelming price action, is now a good time to buy YELP? Or should investors expect a bumpy road ahead? Find out in our full research report, it's free. 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. A company's gross profit margin has a significant impact on its ability to exert pricing power, develop new products, and invest in marketing. These factors can determine the winner in a competitive market. For social network businesses like Yelp, gross profit tells us how much money the company gets to keep after covering the base cost of its products and services, which typically include customer service, data center, and other infrastructure expenses. Yelp's gross margin is one of the highest in the consumer internet sector, an output of its asset-lite business model and strong pricing power. It also enables the company to fund large investments in product and marketing during periods of rapid growth to achieve higher profits in the future. As you can see below, it averaged an elite 91.3% gross margin over the last two years. Said differently, roughly $91.35 was left to spend on selling, marketing, and R&D for every $100 in revenue. Investors frequently analyze operating income to understand a business's core profitability. Similar to operating income, EBITDA is a common profitability metric for consumer internet companies because it removes various one-time or non-cash expenses, offering a more normalized view of profit potential. Yelp has been a well-oiled machine over the last two years. It demonstrated elite profitability for a consumer internet business, boasting an average EBITDA margin of 25%. This result isn't surprising as its high gross margin gives it a favorable starting point. Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns from the ads shown to its users. ARPU can also be a proxy for how valuable advertisers find Yelp's audience and its ad-targeting capabilities. Yelp's ARPU growth has been mediocre over the last two years, averaging 3.9%. This raises questions about its platform's health and ability to engage its users effectively. Yelp's merits more than compensate for its flaws, but at $33.68 per share (or 6.3× forward EV-to-EBITDA), is now the time to initiate a position? See for yourself in our in-depth research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
