Not all profitable companies are built to last – some rely on outdated models or unsustainable advantages.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 is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.

Two Stocks to Sell:

Burlington (BURL)

Trailing 12-Month GAAP Operating Margin: 7.1%

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Why Does BURL Fall Short?

Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 8% over the last six years was below our standards for the consumer retail sector 7.5 percentage point decline in its free cash flow margin over the last year reflects the company’s increased investments to defend its market position Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $280.22 per share, Burlington trades at 29.3x forward P/E. To fully understand why you should be careful with BURL, check out our full research report (it’s free).

XPO (XPO)

Trailing 12-Month GAAP Operating Margin: 8.4%

Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.

Why Do We Pass on XPO?

Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.5% annually over the last five years Flat earnings per share over the last two years lagged its peers Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.2 percentage points

XPO’s stock price of $127.40 implies a valuation ratio of 31.3x forward P/E. If you’re considering XPO for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Nova (NVMI)

Trailing 12-Month GAAP Operating Margin: 28.9%

Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.

Why Are We Bullish on NVMI?

Annual revenue growth of 21.1% over the past two years was outstanding, reflecting market share gains this cycle Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Nova is trading at $257.07 per share, or 29.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 “Liberation Day” tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery – check out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one small-cap stock that could amplify your portfolio’s returns and two best left ignored.

Two Small-Cap Stocks to Sell:

Sprinklr (CXM)

Market Cap: $2.22 billion

Initially focused only on social media management, Sprinklr CXM is a leading provider of unified customer experience management software.

Why Is CXM Risky?

Offerings struggled to generate meaningful interest as its average billings growth of 4% over the last year did not impress

Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend

Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.6 percentage points

Sprinklr’s stock price of $8.59 implies a valuation ratio of 2.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CXM.

The ONE Group (STKS)

Market Cap: $91.89 million

Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality STKS is an upscale restaurant company that operates STK Steakhouse and Kona Grill.

Why Do We Think STKS Will Underperform?

Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants

Earnings per share have dipped by 19.6% annually over the past five years, which is concerning because stock prices follow EPS over the long term

7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

The ONE Group is trading at $2.90 per share, or 0.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including STKS in your portfolio.

One Small-Cap Stock to Watch:

FTAI Infrastructure (FIP)

Market Cap: $726.4 million

Spun off from FTAI Aviation in 2021, FTAI Infrastructure FIP invests in and operates infrastructure and related assets across the transportation and energy sectors.

Why Are We Positive On FIP?

Market share has increased this cycle as its 47.8% annual revenue growth over the last three years was exceptional

Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 78.2%

At $6.33 per share, FTAI Infrastructure trades at 2.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 “Liberation Day” tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery – check out 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).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

Wall Street’s bearish price targets for the stocks in this article signal serious concerns. Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.

Accurately determining a company’s long-term prospects isn’t easy, especially when sentiment is weak. That’s where StockStory comes in – to help you find attractive investment candidates backed by unbiased research. Keeping that in mind, here are two stocks where Wall Street’s pessimism is creating a buying opportunity and one where the outlook is warranted.

One Stock to Sell:

UniFirst (UNF)

Consensus Price Target: $178.25 (3.6% implied return)

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

Why Are We Wary of UNF?

Estimated sales growth of 1% for the next 12 months implies demand will slow from its two-year trend Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up

At $172.03 per share, UniFirst trades at 20.4x forward P/E. Read our free research report to see why you should think twice about including UNF in your portfolio.

Two Stocks to Watch:

CrowdStrike (CRWD)

Consensus Price Target: $482.69 (14.4% implied return)

Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ: CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.

Why Do We Watch CRWD?

Customers view its software as mission-critical to their operations as its ARR has averaged 26.1% growth over the last year Estimated revenue growth of 21.6% for the next 12 months implies its momentum over the last three years will continue CRWD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

CrowdStrike is trading at $421.94 per share, or 21x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Ulta (ULTA)

Consensus Price Target: $503.86 (1.3% implied return)

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Why Does ULTA Stand Out?

Same-store sales provide a solid foundation for the steady expansion of its stores Robust free cash flow margin of 8.6% gives it many options for capital deployment ROIC punches in at 31.2%, illustrating management’s expertise in identifying profitable investments, and its rising returns show it’s making even more lucrative bets

Ulta’s stock price of $497.64 implies a valuation ratio of 21.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 “Liberation Day” tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery – check out 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-small-cap company Comfort Systems (+782% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

Auto parts and accessories retailer Advance Auto Parts AAP reported Q2 CY2025 results topping the market’s revenue expectations, but sales fell by 7.7% year on year to $2.01 billion. The company expects the full year’s revenue to be around $8.5 billion, close to analysts’ estimates. Its non-GAAP profit of $0.69 per share was 18.3% above analysts’ consensus estimates.

Is now the time to buy AAP? Find out in our full research report (it’s free).

Advance Auto Parts (AAP) Q2 CY2025 Highlights:

Revenue: $2.01 billion vs analyst estimates of $1.99 billion (7.7% year-on-year decline, 1% beat)

Adjusted EPS: $0.69 vs analyst estimates of $0.58 (18.3% beat)

Adjusted EBITDA: $116.3 million vs analyst estimates of $132.3 million (5.8% margin, 12.1% miss)

The company reconfirmed its revenue guidance for the full year of $8.5 billion at the midpoint

Management lowered its full-year Adjusted EPS guidance to $1.70 at the midpoint, a 15% decrease

Operating Margin: 1.1%, down from 2.4% in the same quarter last year

Locations: 4,292 at quarter end, down from 4,776 in the same quarter last year

Same-Store Sales were flat year on year, in line with the same quarter last year

Market Capitalization: $3.40 billion

StockStory’s Take

Advance Auto Parts’ Q2 results were met with a strongly negative market reaction, as management attributed the performance to continued margin pressures and a challenging operating environment. CEO Shane O’Kelly noted that while the Pro business showed positive comparable sales growth and DIY sales stabilized, the company is still in the early stages of its turnaround. O’Kelly highlighted, “We are closely monitoring consumer behavior and the potential for recalibration in purchasing habits, especially within our DIY business.” Management acknowledged ongoing operational challenges, including the impact of tariffs and higher costs, contributing to a cautious outlook for the remainder of the year.

Looking forward, Advance Auto Parts’ guidance is shaped by a mix of cautious optimism and recognition of persistent risks. Management reconfirmed revenue expectations but lowered adjusted EPS guidance, citing higher interest expense from recent debt restructuring and uncertainty around tariff pass-throughs. CFO Ryan Grimsland emphasized, “We are planning cautiously in a dynamic macro backdrop and closely monitoring consumer behavior.” The company expects the benefits of its cost-saving and assortment initiatives to materialize gradually, while acknowledging that consumer response to price increases and elasticity remains a significant unknown.

Key Insights from Management’s Remarks

Management attributed Q2’s performance to ongoing store optimization, tariff-related pricing actions, and early traction in turnaround programs, with particular strength in the Pro segment and operational efficiencies from supply chain initiatives.

Pro business outperformance: The Pro segment delivered positive comparable sales, driven by improved inventory availability and targeted assortment efforts in key hard parts categories. Management credited faster SKU expansion and improved time-to-serve metrics for increased Pro customer confidence.

DIY segment stabilization: Although the DIY (do-it-yourself) business recorded a low single-digit sales decline, management observed emerging signs of stabilization. Efforts to improve in-store experience through upgraded facilities and enhanced product training were cited as key focus areas.

Tariff management challenges: The company reported that approximately 40% of cost of goods is exposed to tariffs at a blended rate of 30%. Management is responding with selective price increases, active vendor negotiations, and supply diversification, but noted that full consumer impacts are still unfolding.

Store footprint and supply chain optimization: Advance Auto Parts continued to close or convert underperforming distribution centers (DCs) and stores, aiming for a leaner supply network. These changes have led to operational efficiencies, such as a 33% reduction in shipment errors and improved fill rates.

Debt restructuring for flexibility: The recent $1.95 billion debt offering and establishment of a new asset-backed revolving credit facility were executed to support supply chain financing and preserve liquidity. Management stated this structure is a “bridge” to regaining investment-grade status and maintaining vendor relationships during the turnaround.

Drivers of Future Performance

Advance Auto Parts’ outlook is shaped by ongoing cost pressures, tariff-related pricing actions, and execution of turnaround initiatives, with margin recovery and consumer demand elasticity as key uncertainties.

Tariff pass-through and pricing: Management expects low to mid-single digit inflation from tariffs in the second half, with ongoing efforts to negotiate vendor cost sharing and adjust retail prices. The company remains cautious about the potential impact of higher prices on DIY consumer demand.

Assortment and supply chain initiatives: Continued rollout of the new assortment framework and market hub expansions are expected to enhance parts availability and boost comparable sales, especially in the Pro segment. Management believes these initiatives will drive more meaningful benefits over 12 to 18 months as inventory turnover improves.

Cost structure and margin targets: The company’s path to its 2027 margin goal relies heavily on gross margin expansion through merchandising discipline and supply chain productivity, while maintaining SG&A discipline. Management acknowledged that the pace of margin recovery could be nonlinear, and that macroeconomic headwinds may delay some expected benefits.

Catalysts in Upcoming Quarters

In upcoming quarters, our analyst team will closely monitor (1) the pace at which tariff-related price increases are absorbed by DIY customers, (2) measurable improvements in gross margin and operating efficiency from supply chain and assortment initiatives, and (3) progress on store upgrades and market hub expansions. The trajectory of Pro segment growth and consumer behavior in response to inflation remain critical variables for ongoing performance.

Advance Auto Parts currently trades at $57.25, down from $61.81 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

Now Could Be The Perfect Time To Invest In These Stocks

Donald Trump’s April 2025 “Liberation Day” tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery – check 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-small-cap company Comfort Systems (+782% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

A highly volatile stock can deliver big gains – or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren’t prepared.

Navigating these stocks isn’t easy, which is why StockStory helps you find Comfort In Chaos. Keeping that in mind, here is one volatile stock that could deliver huge gains and two best left to the gamblers.

Two Stocks to Sell:

Leslie’s (LESL)

Rolling One-Year Beta: 1.49

Named after founder Philip Leslie, who established the company in 1963, Leslie’s (NASDAQ: LESL) is a retailer that sells pool and spa supplies, equipment, and maintenance services.

Why Should You Dump LESL?

Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience Free cash flow margin shrank by 8.9 percentage points over the last year, suggesting the company is consuming more capital to stay competitive Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $0.31 per share, Leslie’s trades at 0.7x forward EV-to-EBITDA. If you’re considering LESL for your portfolio, see our FREE research report to learn more.

REV Group (REVG)

Rolling One-Year Beta: 1.62

Offering the first full-electric North American fire truck, REV (NYSE: REVG) manufactures and sells specialty vehicles.

Why Does REVG Give Us Pause?

Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years Gross margin of 12% reflects its high production costs Poor expense management has led to an operating margin of 3% that is below the industry average

REV Group is trading at $50.91 per share, or 18.2x forward P/E. To fully understand why you should be careful with REVG, check out our full research report (it’s free).

One Stock to Watch:

Piper Sandler (PIPR)

Rolling One-Year Beta: 1.52

Tracing its roots back to 1895 and rebranded from Piper Jaffray in 2020, Piper Sandler (NYSE: PIPR) is an investment bank that provides advisory services, capital raising, institutional brokerage, and research for corporations, governments, and institutional investors.

Why Could PIPR Be a Winner?

Additional sales over the last two years increased its profitability as the 25.6% annual growth in its earnings per share outpaced its revenue Balance sheet strength has increased this cycle as its 13.2% annual tangible book value per share growth over the last five years was exceptional ROE punches in at 14.3%, illustrating management’s expertise in identifying profitable investments

Piper Sandler’s stock price of $322.06 implies a valuation ratio of 21.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 “Liberation Day” tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery – check 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-small-cap company Comfort Systems (+782% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.