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 balance growth and profitability and one that may face some trouble.
One Stock to Sell:
DoubleVerify (DV)
Trailing 12-Month GAAP Operating Margin: 10.9%
Using advanced analytics to evaluate over 17 billion digital ad transactions daily, DoubleVerify (NYSE: DV) provides AI-powered technology that verifies digital ads are viewable, fraud-free, brand-suitable, and displayed in the intended geographic location.
Why Does DV Fall Short?
- Estimated sales growth of 9.3% for the next 12 months implies demand will slow from its two-year trend
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Operating margin declined by 1.8 percentage points over the last year as it scaled
DoubleVerify’s stock price of $11.17 implies a valuation ratio of 2.3x forward price-to-sales. If you’re considering DV for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Limbach (LMB)
Trailing 12-Month GAAP Operating Margin: 8%
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Do We Like LMB?
- Operating margin improved by 6 percentage points over the last five years as it eliminated redundant costs
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 42.5% outpaced its revenue gains
- Free cash flow margin increased by 8 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $82.26 per share, Limbach trades at 19.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Incyte (INCY)
Trailing 12-Month GAAP Operating Margin: 30.8%
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ: INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Why Could INCY Be a Winner?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 15.5% annual sales growth over the last two years
- Share repurchases over the last five years enabled its annual earnings per share growth of 60.8% to outpace its revenue gains
- Free cash flow margin expanded by 6.8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Incyte is trading at $102.72 per share, or 13.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
