3 Profitable Stocks with Questionable Fundamentals

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 three profitable companies to steer clear of and a few better alternatives.

Wix (WIX)

Trailing 12-Month GAAP Operating Margin: 7%

Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.

Why Are We Hesitant About WIX?

1. 11.5% annual revenue growth over the last three years was slower than its software peers
2. High servicing costs result in a relatively inferior gross margin of 68.1% that must be offset through increased usage

Wix’s stock price of $156.30 implies a valuation ratio of 4.6x forward price-to-sales. To fully understand why you should be careful with WIX, check out our full research report (it’s free).

Accel Entertainment (ACEL)

Trailing 12-Month GAAP Operating Margin: 7.3%

Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.

Why Is ACEL Not Exciting?

1. Number of video gaming terminals sold has disappointed over the past two years, indicating weak demand for its offerings
2. Estimated sales growth of 6.5% for the next 12 months implies demand will slow from its two-year trend
3. Low free cash flow margin of 4.4% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $11.24 per share, Accel Entertainment trades at 12.2x forward P/E. Check out our free in-depth research report to learn more about why ACEL doesn’t pass our bar.

Lindblad Expeditions (LIND)

Trailing 12-Month GAAP Operating Margin: 4.5%

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. 14.9% annual revenue growth over the last five years was slower than its consumer discretionary peers
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 70.6% annually
3. Push for growth has led to negative returns on capital, signaling value destruction

Lindblad Expeditions is trading at $10.86 per share, or 5.4x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LIND in your portfolio.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 Kadant (+351% 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