Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 three profitable companies to steer clear of and a few better alternatives.
Accel Entertainment (ACEL)
Trailing 12-Month GAAP Operating Margin: 7.6%
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Why Do We Pass on ACEL?
- Performance surrounding its video gaming terminals sold has lagged its peers
- Poor free cash flow margin of 4.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
At $10.77 per share, Accel Entertainment trades at 10.7x forward P/E. Check out our free in-depth research report to learn more about why ACEL doesn’t pass our bar.
Greenbrier (GBX)
Trailing 12-Month GAAP Operating Margin: 11.1%
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE: GBX) supplies the freight rail transportation industry with railcars and related services.
Why Do We Think Twice About GBX?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 13.9%
- Negative free cash flow raises questions about the return timeline for its investments
Greenbrier is trading at $47.15 per share, or 11.2x forward P/E. Read our free research report to see why you should think twice about including GBX in your portfolio.
Intercontinental Exchange (ICE)
Trailing 12-Month GAAP Operating Margin: 48.9%
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Why Are We Hesitant About ICE?
- Performance over the past five years shows its incremental sales were less profitable, as its 9.3% annual earnings per share growth trailed its revenue gains
Intercontinental Exchange’s stock price of $160.34 implies a valuation ratio of 21.7x forward P/E. Check out our free in-depth research report to learn more about why ICE doesn’t pass our bar.
Stocks We Like More
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The names generating the next wave of massive growth are right here in 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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