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.

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 leverage their financial strength to beat the competition and one that may face some trouble.

One Stock to Sell:

Boot Barn (BOOT)

Trailing 12-Month GAAP Operating Margin: 12.3%

With a strong store presence in Texas, California, Florida, and Oklahoma, Boot Barn (NYSE:BOOT) is a western-inspired apparel and footwear retailer.

Why Are We Cautious About BOOT?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Modest revenue base of $1.85 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
3. Free cash flow margin dropped by 3.7 percentage points over the last year, implying the company became more capital intensive as competition picked up

Boot Barn’s stock price of $113.49 implies a valuation ratio of 17.3x forward P/E. Dive into our free research report to see why there are better opportunities than BOOT.

Two Stocks to Buy:

AAON (AAON)

Trailing 12-Month GAAP Operating Margin: 15.8%

Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.

Why Is AAON a Good Business?

1. Annual revenue growth of 20.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Earnings per share grew by 18.2% annually over the last five years and trumped its peers
3. ROIC punches in at 20.7%, illustrating management’s expertise in identifying profitable investments

AAON is trading at $99.86 per share, or 41.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Liquidity Services (LQDT)

Trailing 12-Month GAAP Operating Margin: 7.4%

Powering what it calls the "circular economy" with over 5.5 million registered buyers across its platforms, Liquidity Services (NASDAQ:LQDT) operates online marketplaces that connect buyers and sellers of surplus assets, from consumer returns to industrial equipment to government property.

Why Is LQDT a Top Pick?

1. Annual revenue growth of 20.4% over the last two years was superb and indicates its market share increased during this cycle
2. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Returns on capital are climbing as management makes more lucrative bets

At $32.07 per share, Liquidity Services trades at 18.4x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks That Overcame Trump’s 2018 Tariffs

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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.