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 is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
DoubleVerify (DV)
Trailing 12-Month GAAP Operating Margin: 10.9%
Using advanced analytics to evaluate over 17 billion digital ad transactions daily, DoubleVerify (NYSE:DV) provides AI-powered technology that verifies digital ads are viewable, fraud-free, brand-suitable, and displayed in the intended geographic location.
Why Does DV Give Us Pause?
- Estimated sales growth of 9.3% for the next 12 months implies demand will slow from its two-year trend
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Operating margin declined by 1.8 percentage points over the last year as it scaled
DoubleVerify’s stock price of $11.09 implies a valuation ratio of 2.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DV.
Papa John's (PZZA)
Trailing 12-Month GAAP Operating Margin: 4.5%
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ:PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Do We Avoid PZZA?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Gross margin of 12.1% is below its competitors, leaving less money for marketing and promotions
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 3.6 percentage points
Papa John's is trading at $41.19 per share, or 23.9x forward P/E. To fully understand why you should be careful with PZZA, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
SEI Investments (SEIC)
Trailing 12-Month GAAP Operating Margin: 27.2%
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Will SEIC Outperform?
- Products and services resonate with customers, evidenced by its respectable 9% annualized sales growth over the last two years
- Share repurchases over the last two years enabled its annual earnings per share growth of 26.9% to outpace its revenue gains
- Industry-leading 26.7% return on equity demonstrates management’s skill in finding high-return investments
At $80.92 per share, SEI Investments trades at 15.1x 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.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 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 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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