3 Profitable Stocks That Concern Us

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.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are three profitable companies to avoid and some better opportunities instead.

Universal Technical Institute (UTI)

Trailing 12-Month GAAP Operating Margin: 10%

Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.

Why Are We Out on UTI?

1. Sluggish trends in its new students suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Projected 4.1 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
3. Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate

Universal Technical Institute’s stock price of $27.49 implies a valuation ratio of 14.5x forward EV-to-EBITDA. If you’re considering UTI for your portfolio, see our FREE research report to learn more.

Littelfuse (LFUS)

Trailing 12-Month GAAP Operating Margin: 9.6%

The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ:LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.

Why Does LFUS Give Us Pause?

1. Annual sales declines of 2.5% for the past two years show its products and services struggled to connect with the market during this cycle
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Waning returns on capital imply its previous profit engines are losing steam

At $297.83 per share, Littelfuse trades at 24.5x forward P/E. To fully understand why you should be careful with LFUS, check out our full research report (it’s free).

Delta (DAL)

Trailing 12-Month GAAP Operating Margin: 9.2%

One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Should You Sell DAL?

1. Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Delta is trading at $70.46 per share, or 9.8x forward P/E. Dive into our free research report to see why there are better opportunities than DAL.

Stocks We Like More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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.