1 Profitable Stock for Long-Term Investors and 2 Facing Headwinds

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that leverages its financial strength to beat the competition and two that may face some trouble.

Two Stocks to Sell:

Wiley (WLY)

Trailing 12-Month GAAP Operating Margin: 14.3%

With roots dating back to 1807 when Charles Wiley opened a small printing shop in Manhattan, John Wiley & Sons (NYSE:WLY) is a global academic publisher that provides scientific journals, books, digital courseware, and knowledge solutions for researchers, students, and professionals.

Why Are We Out on WLY?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.9% annually over the last five years
2. Free cash flow margin dropped by 7.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Underwhelming 10.8% return on capital reflects management’s difficulties in finding profitable growth opportunities

Wiley’s stock price of $42.25 implies a valuation ratio of 1.4x trailing 12-month price-to-sales. Read our free research report to see why you should think twice about including WLY in your portfolio.

WEX (WEX)

Trailing 12-Month GAAP Operating Margin: 25.7%

Originally founded in 1983 as Wright Express to serve the fleet card market, WEX (NYSE:WEX) provides payment processing and business solutions across fleet management, employee benefits, and corporate payments sectors.

Why Do We Think Twice About WEX?

1. Muted 2.6% annual revenue growth over the last two years shows its demand lagged behind its financials peers
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 5.2% annually
3. Underwhelming 10% return on equity reflects management’s difficulties in finding profitable growth opportunities

WEX is trading at $171.96 per share, or 10.8x forward P/E. Check out our free in-depth research report to learn more about why WEX doesn’t pass our bar.

One Stock to Watch:

ResMed (RMD)

Trailing 12-Month GAAP Operating Margin: 32.7%

Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE:RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.

Why Does RMD Stand Out?

1. Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
2. Additional sales over the last five years increased its profitability as the 14.9% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin jumped by 12.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $275 per share, ResMed trades at 26.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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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-small-cap company Exlservice (+354% 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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