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".
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 is one profitable company that balances growth and profitability and two best left off your watchlist.
Two Stocks to Sell:
Shutterstock (SSTK)
Trailing 12-Month GAAP Operating Margin: 8.9%
Originally featuring a library that included many of founder Jon Oringer’s photos, Shutterstock (NYSE: SSTK) is now a digital platform where customers can license and use hundreds of millions of pieces of content.
Why Does SSTK Give Us Pause?
- Focus on expanding its platform came at the expense of monetization as its average revenue per request fell by 15.1% annually
- Projected sales decline of 1.1% for the next 12 months points to a tough demand environment ahead
- Annual earnings per share growth of 2.5% underperformed its revenue over the last three years, partly because it diluted shareholders
Shutterstock is trading at $19.71 per share, or 2.7x forward EV/EBITDA. Read our free research report to see why you should think twice about including SSTK in your portfolio.
Assurant (AIZ)
Trailing 12-Month GAAP Operating Margin: 8.4%
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE: AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Are We Wary of AIZ?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.1% over the last five years was below our standards for the insurance sector
- Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 4.6% annualized growth in net premiums earned for the last five years
- Annual book value per share growth of 2.7% over the last five years lagged behind its insurance peers as its large balance sheet made it difficult to generate incremental capital growth
At $226.05 per share, Assurant trades at 1.9x forward P/B. Check out our free in-depth research report to learn more about why AIZ doesn’t pass our bar.
One Stock to Buy:
LendingClub (LC)
Trailing 12-Month GAAP Operating Margin: 14.5%
Pioneering peer-to-peer lending in the US before evolving into a digital bank, LendingClub (NYSE: LC) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
Why Are We Backing LC?
- Annual revenue growth of 24.7% over the last five years was superb and indicates its market share increased during this cycle
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 38.3% annually
LendingClub’s stock price of $15.68 implies a valuation ratio of 10.8x forward P/E. Is now a good time to buy? Find out in our full 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 6 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-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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