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".

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 two profitable companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

OPENLANE $(KAR.AU)$

Trailing 12-Month GAAP Operating Margin: 13.5%

Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE $(KAR)$ operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.

Why Do We Steer Clear of KAR?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.3% annually over the last five years
2. ROIC of 2.8% reflects management’s challenges in identifying attractive investment opportunities
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

OPENLANE’s stock price of $28.93 implies a valuation ratio of 31.2x forward P/E. If you’re considering KAR for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Micron $(MU)$

Trailing 12-Month GAAP Operating Margin: 22.6%

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Does MU Stand Out?

1. Annual revenue growth of 36.4% over the past two years was outstanding, reflecting market share gains this cycle
2. Notable projected revenue growth of 36.8% for the next 12 months hints at market share gains
3. Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 22.8% outpaced its revenue gains

At $113.15 per share, Micron trades at 10.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Brinker International $(EAT.UK)$

Trailing 12-Month GAAP Operating Margin: 8.6%

Founded by Norman Brinker in Dallas, Brinker International $(EAT)$ is a casual restaurant chain that operates the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.

Why Could EAT Be a Winner?

1. Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
2. Operating margin expanded by 3.6 percentage points over the last year as it scaled and became more efficient
3. Free cash flow margin grew by 4.2 percentage points over the last year, giving the company more chips to play with

Brinker International is trading at $159.09 per share, or 17.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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 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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