Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.

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 generate reliable profits without sacrificing growth and one that may struggle to keep up.

One Stock to Sell:

Caterpillar (CAT)

Trailing 12-Month GAAP Operating Margin: 16.5%

With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Why Are We Wary of CAT?

1. Flat sales over the last two years suggest it must find different ways to grow during this cycle
2. High input costs result in an inferior gross margin of 29.2% that must be offset through higher volumes
3. Earnings per share have dipped by 5.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term

Caterpillar’s stock price of $759.64 implies a valuation ratio of 33.2x forward P/E. Dive into our free research report to see why there are better opportunities than CAT.

Two Stocks to Watch:

Inspire Medical Systems (INSP)

Trailing 12-Month GAAP Operating Margin: 7.1%

Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.

Why Do We Like INSP?

1. Annual revenue growth of 51.2% over the past five years was outstanding, reflecting market share gains this cycle
2. Earnings per share grew by 25.9% annually over the last five years, massively outpacing its peers
3. Free cash flow margin increased by 19.2 percentage points over the last five years, giving the company more capital to invest or return to shareholders

At $58.28 per share, Inspire Medical Systems trades at 30.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Genpact (G)

Trailing 12-Month GAAP Operating Margin: 14.8%

Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.

Why Are We Positive On G?

1. Share repurchases over the last five years enabled its annual earnings per share growth of 11.5% to outpace its revenue gains
2. G is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities

Genpact is trading at $38.80 per share, or 9.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.