1 Profitable Stock for Long-Term Investors and 2 Facing Headwinds

1 Profitable Stock for Long-Term Investors and 2 Facing Headwinds
Post Author webadmin
2025-09-16

1 Profitable Stock for Long-Term Investors and 2 Facing Headwinds

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.

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 is one profitable company that balances growth and profitability and two that may struggle to keep up.

Trailing 12-Month GAAP Operating Margin: 5.4%

Based in Cleveland, Park-Ohio (NASDAQ:PKOH) provides supply chain management services, capital equipment, and manufactured components.

Why Are We Cautious About PKOH?

  1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years

  2. Gross margin of 15.4% is below its competitors, leaving less money to invest in areas like marketing and R&D

  3. Negative free cash flow raises questions about the return timeline for its investments

Park-Ohio is trading at $21.79 per share, or 6.5x forward P/E. Dive into our free research report to see why there are better opportunities than PKOH.

Trailing 12-Month GAAP Operating Margin: 11.6%

With a global footprint spanning three continents and approximately 81,000 beds across 100 facilities, GEO Group (NYSE:GEO) operates secure facilities, processing centers, and reentry services for government agencies in the United States, Australia, and South Africa.

Why Are We Out on GEO?

  1. Flat sales over the last five years suggest it must find different ways to grow during this cycle

  2. Earnings per share fell by 12% annually over the last five years while its revenue was flat, showing each sale was less profitable

  3. Free cash flow margin dropped by 7.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $21.81 per share, GEO Group trades at 11.7x forward P/E. Read our free research report to see why you should think twice about including GEO in your portfolio, it’s free.

Trailing 12-Month GAAP Operating Margin: 12.6%

Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE:YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.

Why Are We Fans of YELP?

  1. Prominent and differentiated platform results in a best-in-class gross margin of 91.1%

  2. Highly efficient business model is illustrated by its impressive 26% EBITDA margin, and its operating leverage amplified its profits over the last few years

  3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 28.4% exceeded its revenue gains over the last three years