While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here is one profitable company that leverages its financial strength to beat the competition and two that may struggle to keep up.
Two Stocks to Sell:
WideOpenWest (WOW)
Trailing 12-Month GAAP Operating Margin: 1.4%
Initially started in Denver as a cable television provider, WideOpenWest (NYSE: WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
Why Should You Sell WOW?
- Number of subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Cash-burning history makes us doubt the long-term viability of its business model
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $5.13 per share, WideOpenWest trades at 1.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than WOW.
Brookdale (BKD)
Trailing 12-Month GAAP Operating Margin: 1.9%
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE: BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Why Does BKD Fall Short?
- Sales tumbled by 3.8% annually over the last five years, showing market trends are working against its favor during this cycle
- Low returns on capital reflect management’s struggle to allocate funds effectively
- High net-debt-to-EBITDA ratio of 12× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Brookdale’s stock price of $8.97 implies a valuation ratio of 4.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including BKD in your portfolio.
One Stock to Watch:
Hims & Hers Health (HIMS)
Trailing 12-Month GAAP Operating Margin: 6.2%
Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.
Why Does HIMS Catch Our Eye?
- Average customer growth of 43.3% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future
- Free cash flow margin expanded by 14.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Hims & Hers Health is trading at $47.50 per share, or 40.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 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 Tecnoglass (+1,754% 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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