Even if a company is profitable, it doesn’t always mean it’s 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 that don’t make the cut and some better opportunities instead.
Helios (HLIO)
Trailing 12-Month GAAP Operating Margin: 6.6%
Founded on the principle of treating others as one wants to be treated, Helios (NYSE: HLIO) designs, manufactures, and sells motion and electronic control components for various sectors.
Why Is HLIO 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
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $65.98 per share, Helios trades at 23.2x forward P/E. Check out our free in-depth research report to learn more about why HLIO doesn’t pass our bar.
P10 (PX)
Trailing 12-Month GAAP Operating Margin: 20.7%
Operating as a bridge between institutional investors and hard-to-access private market opportunities, P10 (NYSE: PX) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.
Why Are We Cautious About PX?
- Performance over the past two years shows its incremental sales were less profitable, as its 7.1% annual earnings per share growth trailed its revenue gains
- Below-average return on equity indicates management struggled to find compelling investment opportunities
P10’s stock price of $10.70 implies a valuation ratio of 10.4x forward P/E. If you’re considering PX for your portfolio, see our FREE research report to learn more.
Affirm (AFRM)
Trailing 12-Month GAAP Operating Margin: 3.2%
Founded by PayPal co-founder Max Levchin with a mission to create honest financial products, Affirm (NASDAQ: AFRM) provides a payment network that allows consumers to make purchases and pay for them over time with transparent, flexible installment loans.
Why Does AFRM Give Us Pause?
- Negative return on equity shows management lost money while trying to expand the business
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Affirm is trading at $68.96 per share, or 22.3x forward P/E. Dive into our free research report to see why there are better opportunities than AFRM.
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
