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 three profitable companies to avoid and some better opportunities instead.
Marriott (MAR)
Trailing 12-Month GAAP Operating Margin: 15.1%
Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.
Why Do We Think Twice About MAR?
- Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
- Estimated sales growth of 4% for the next 12 months implies demand will slow from its two-year trend
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Marriott is trading at $265 per share, or 25.8x forward P/E. Check out our free in-depth research report to learn more about why MAR doesn’t pass our bar.
Concrete Pumping (BBCP)
Trailing 12-Month GAAP Operating Margin: 11.9%
Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Why Is BBCP Risky?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Forecasted revenue decline of 3.1% for the upcoming 12 months implies demand will fall even further
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $6.20 per share, Concrete Pumping trades at 14.6x forward P/E. Read our free research report to see why you should think twice about including BBCP in your portfolio.
Otis (OTIS)
Trailing 12-Month GAAP Operating Margin: 13.2%
Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE:OTIS) is an elevator and escalator manufacturing, installation and service company.
Why Are We Out on OTIS?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 3.9% for the next 12 months is soft and implies weaker demand
- 2.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Otis’s stock price of $96.06 implies a valuation ratio of 23x forward P/E. To fully understand why you should be careful with OTIS, check out our full research report (it’s free).
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.