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".

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 face some trouble.

Trailing 12-Month GAAP Operating Margin: 7.5%

With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE:CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.

Why Is CNMD Not Exciting?

5.1% annual revenue growth over the last two years was slower than its healthcare peers

Subscale operations are evident in its revenue base of $1.37 billion, meaning it has fewer distribution channels than its larger rivals

Forecasted revenue decline of 1.3% for the upcoming 12 months implies demand will fall off a cliff

CONMED’s stock price of $45.91 implies a valuation ratio of 10.6x forward P/E. If you’re considering CNMD for your portfolio, see our FREE research report to learn more.

Trailing 12-Month GAAP Operating Margin: 18.1%

Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE:WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.

Why Does WCN Fall Short?

Estimated sales growth of 4.9% for the next 12 months implies demand will slow from its two-year trend

Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.5 percentage points

ROIC of 6.6% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

At $167.05 per share, Waste Connections trades at 30.6x forward P/E. Read our free research report to see why you should think twice about including WCN in your portfolio, it’s free.

Trailing 12-Month GAAP Operating Margin: 19.5%

Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ:ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.

Why Should You Buy ORLY?

Same-store sales growth averaged 3.8% over the past two years, showing it’s bringing new and repeat shoppers into its stores

Highly efficient business model is illustrated by its impressive 19.5% operating margin

ROIC punches in at 42.5%, illustrating management’s expertise in identifying profitable investments

O'Reilly is trading at $91.15 per share, or 28.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

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

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