2 Profitable Stocks to Consider Right Now and 1 We Question

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

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 two profitable companies that generate reliable profits without sacrificing growth and one that may face some trouble.

One Stock to Sell:

CarGurus (CARG)

Trailing 12-Month GAAP Operating Margin: 16.5%

Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ:CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.

Why Are We Cautious About CARG?

1. Products and services aren't resonating with the market as its revenue declined by 15.1% annually over the last three years
2. White space opportunities may be dwindling as its growth in paying dealers averaged a weak 1.7%
3. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.3%

CarGurus is trading at $34.90 per share, or 11x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CARG doesn’t pass our bar.

Two Stocks to Watch:

Republic Services (RSG)

Trailing 12-Month GAAP Operating Margin: 20.2%

Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.

Why Does RSG Stand Out?

1. Annual revenue growth of 9.8% over the last five years beat the sector average and underscores the unique value of its offerings
2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 18.8%, and its profits increased over the last five years as it scaled
3. Robust free cash flow margin of 13.5% gives it many options for capital deployment

Republic Services’s stock price of $234.95 implies a valuation ratio of 32.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Reddit (RDDT)

Trailing 12-Month GAAP Operating Margin: 7.9%

Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.

Why Are We Bullish on RDDT?

1. Has the opportunity to boost monetization through new features and premium offerings as its domestic daily active visitors have grown by 33.7% annually over the last two years
2. Earnings per share grew by 38.6% annually over the last three years and trumped its peers
3. Free cash flow margin jumped by 35.1 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $224.98 per share, Reddit trades at 58.8x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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