1 Profitable Stock with Impressive Fundamentals and 2 Facing Headwinds

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. That said, here is one profitable company that balances growth and profitability and two best left off your watchlist.

Two Stocks to Sell:

Upstart (UPST)

Trailing 12-Month GAAP Operating Margin: 2%

Using over 2,500 data variables and trained on nearly 82 million repayment events, Upstart (NASDAQ:UPST) is an AI-powered lending platform that uses machine learning to help banks and credit unions more accurately assess borrower risk for personal loans, auto loans, and home equity lines of credit.

Why Does UPST Give Us Pause?

1. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
2. Negative free cash flow raises questions about the return timeline for its investments
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Upstart is trading at $45.29 per share, or 4.1x forward price-to-sales. To fully understand why you should be careful with UPST, check out our full research report (it’s free).

Hub Group (HUBG)

Trailing 12-Month GAAP Operating Margin: 3.8%

Started with $10,000, Hub Group (NASDAQ:HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.

Why Should You Sell HUBG?

1. Weak unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 28% annually, worse than its revenue
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $47.53 per share, Hub Group trades at 24.2x forward P/E. Dive into our free research report to see why there are better opportunities than HUBG.

One Stock to Buy:

Reddit (RDDT)

Trailing 12-Month GAAP Operating Margin: 13.8%

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 Is RDDT a Good Business?

1. Has the opportunity to boost monetization through new features and premium offerings as its domestic daily active visitors have grown by 32.3% annually over the last two years
2. Earnings growth has massively outpaced its peers over the last three years as its EPS has compounded at 40.2% annually
3. Free cash flow margin expanded by 41.8 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends

Reddit’s stock price of $196.47 implies a valuation ratio of 36.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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.