Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here are three profitable companies to avoid and some better opportunities instead.
Norwegian Cruise Line (NCLH)
Trailing 12-Month GAAP Operating Margin: 16%
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE: NCLH) is a premier global cruise company.
Why Are We Cautious About NCLH?
- Sluggish trends in its passenger cruise days suggest customers aren’t adopting its solutions as quickly as the company hoped
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Norwegian Cruise Line’s stock price of $25.28 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including NCLH in your portfolio.
Adtalem (ATGE)
Trailing 12-Month GAAP Operating Margin: 19.3%
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE: ATGE) is a global provider of workforce solutions and educational services.
Why Is ATGE Not Exciting?
- 11% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Estimated sales growth of 7.5% for the next 12 months implies demand will slow from its two-year trend
- ROIC of 10.1% reflects management’s challenges in identifying attractive investment opportunities
At $134.43 per share, Adtalem trades at 17.8x forward P/E. Check out our free in-depth research report to learn more about why ATGE doesn’t pass our bar.
Sixth Street Specialty Lending (TSLX)
Trailing 12-Month GAAP Operating Margin: 53.5%
Originally launched as TPG Specialty Lending before rebranding in 2020, Sixth Street Specialty Lending (NYSE: TSLX) is a business development company that provides customized financing solutions to middle-market companies across various industries.
Why Does TSLX Give Us Pause?
- Annual earnings per share growth of 3.1% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Sixth Street Specialty Lending is trading at $24.95 per share, or 11.8x forward P/E. If you’re considering TSLX for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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-micro-cap company Kadant (+351% 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.
