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”.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, 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:
Deere (DE)
Trailing 12-month GAAP operating margin: 12.9%
Revolutionizing agriculture with the first self-polishing cast-steel plow in the 1800s, Deere (NYSE: DE) manufactures and distributes advanced agricultural, construction, forestry, and turf care equipment.
Why Are We Bearish on DE?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.4% annually over the last two years
- Earnings per share have contracted by 21.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Waning returns on capital imply its previous profit engines are losing steam
Deere’s stock price of $663.42 implies a valuation ratio of 32.2x forward P/E. Read our free research report to see why you should think twice about including DE in your portfolio.
Two stocks to watch:
Coinbase (COIN)
Trailing 12-month GAAP operating margin: 3.6%
Widely regarded as the face of crypto, Coinbase (NASDAQ: COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Should COIN Be on Your Watchlist?
- Superior platform functionality and low servicing costs are reflected in its best-in-class gross margin of 85.6%
- Highly efficient business model is illustrated by its impressive 37.1% EBITDA margin, and its operating leverage amplified its profits over the last few years
- Strong free cash flow margin of 31.4% enables it to reinvest or return capital consistently
At $135.82 per share, Coinbase trades at 19.7x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Agilysys (AGYS)
Trailing 12-month GAAP operating margin: 14.3%
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Why Do We Like AGYS?
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Excellent operating margin of 14.3% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- AGYS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Agilysys is trading at $119.71 per share, or 8.6x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks we like even more
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
