2 Profitable Stocks on Our Watchlist and 1 Facing Headwinds

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 two profitable companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

Target (TGT)

Trailing 12-Month GAAP Operating Margin: 4.5%

With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof.

Why Does TGT Worry Us?

1. Sales were flat over the last three years, indicating it’s failed to expand its business
2. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
3. Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 28.1%

At $126.79 per share, Target trades at 15.1x forward P/E. Dive into our free research report to see why there are better opportunities than TGT.

Two Stocks to Watch:

Everpure (P)

Trailing 12-Month GAAP Operating Margin: 4.2%

Founded in 2009 as a pioneer in enterprise all-flash storage technology, Everpure (NYSE:P) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.

Why Are We Bullish on P?

1. ARR growth averaged 19.2% over the past two years, showing customers are willing to take multi-year bets on its offerings
2. Earnings per share have massively outperformed its peers over the last five years, increasing by 61.1% annually
3. P is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

Everpure’s stock price of $79.14 implies a valuation ratio of 28.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

S&P Global (SPGI)

Trailing 12-Month GAAP Operating Margin: 43.9%

Tracing its roots back to 1860 when it published the first railroad industry manual, S&P Global (NYSE:SPGI) provides credit ratings, market intelligence, commodity data, automotive analytics, and financial indices that help investors and businesses make decisions.

Why Is SPGI Interesting?

1. Annual revenue growth of 10.7% over the last two years was above the sector average and underscores its products and services value to customers
2. Share repurchases have increased shareholder returns as its annual earnings per share growth of 17% exceeded its revenue gains over the last two years
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

S&P Global is trading at $424.50 per share, or 20.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.