3 Profitable Stocks We Find Risky

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here are three profitable companies to avoid and some better opportunities instead.

8x8 (EGHT)

Trailing 12-Month GAAP Operating Margin: 2.2%

Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ:EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.

Why Should You Sell EGHT?

1. Average billings growth of 2.4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Sales are projected to be flat over the next 12 months and imply weak demand
3. Efficiency rose over the last year as its Operating margin increased by 2.1 percentage points

At $2.30 per share, 8x8 trades at 0.4x forward price-to-sales. To fully understand why you should be careful with EGHT, check out our full research report (it’s free).

Lindblad Expeditions (LIND)

Trailing 12-Month GAAP Operating Margin: 6.8%

Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ:LIND) offers cruising experiences to remote destinations in partnership with National Geographic.

Why Should You Dump LIND?

1. Sales trends were unexciting over the last two years as its 16.4% annual growth was below the typical consumer discretionary company
2. Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
3. Free cash flow margin is expected to remain in place over the coming year

Lindblad Expeditions is trading at $18.39 per share, or 146.4x forward P/E. Check out our free in-depth research report to learn more about why LIND doesn’t pass our bar.

Service International (SCI)

Trailing 12-Month GAAP Operating Margin: 22.7%

Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.

Why Do We Pass on SCI?

1. Demand for its offerings was relatively low as its number of funeral services performed has underwhelmed
2. Low free cash flow margin of 13.1% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Service International’s stock price of $82.17 implies a valuation ratio of 20.3x forward P/E. If you’re considering SCI for your portfolio, see our FREE research report to learn more.

Stocks We Like More

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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.