3 Profitable Stocks That Concern Us

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.

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here are three profitable companies that don’t make the cut and some better opportunities instead.

GE HealthCare (GEHC)

Trailing 12-Month GAAP Operating Margin: 13.5%

Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ:GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.

Why Does GEHC Fall Short?

1. 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
2. Earnings per share fell by 3.8% annually over the last four years while its revenue grew, showing its incremental sales were much less profitable
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.2 percentage points

At $82.07 per share, GE HealthCare trades at 16.9x forward P/E. Read our free research report to see why you should think twice about including GEHC in your portfolio.

MarketAxess (MKTX)

Trailing 12-Month GAAP Operating Margin: 41.2%

Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ:MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.

Why Do We Think Twice About MKTX?

1. Muted 5.3% annual revenue growth over the last five years shows its demand lagged behind its financials peers
2. Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable

MarketAxess’s stock price of $171.75 implies a valuation ratio of 21.9x forward P/E. Dive into our free research report to see why there are better opportunities than MKTX.

Viavi Solutions (VIAV)

Trailing 12-Month GAAP Operating Margin: 4.7%

Once known as JDS Uniphase before its 2015 rebranding, Viavi Solutions (NASDAQ:VIAV) provides testing, monitoring and assurance solutions for telecommunications, cloud, enterprise, military, and other critical networks and infrastructure.

Why Should You Sell VIAV?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Free cash flow margin dropped by 7.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Viavi Solutions is trading at $19.52 per share, or 27x forward P/E. If you’re considering VIAV for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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.