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 leverages its financial strength to beat the competition and two that may face some trouble.

Two Stocks to Sell:

Artivion (AORT)

Trailing 12-Month GAAP Operating Margin: 10%

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE:AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

Why Do We Pass on AORT?

1. 7.1% annual revenue growth over the last five years was slower than its healthcare peers

2. Modest revenue base of $388.5 million gives it less fixed cost leverage and fewer distribution channels than larger companies

3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 5.1% annually while its revenue grew

At $23.39 per share, Artivion trades at 48.5x forward price-to-earnings. If you’re considering AORT for your portfolio, see our FREE research report to learn more .

RadNet (RDNT)

Trailing 12-Month GAAP Operating Margin: 5.7%

With over 350 imaging facilities across seven states and a growing artificial intelligence division, RadNet (NASDAQ:RDNT) operates a network of outpatient diagnostic imaging centers across the United States, offering services like MRI, CT scans, PET scans, mammography, and X-rays.

Why Do We Think Twice About RDNT?

1. Modest revenue base of $1.83 billion gives it less fixed cost leverage and fewer distribution channels than larger companies

2. 10 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

RadNet’s stock price of $50.14 implies a valuation ratio of 74.8x forward price-to-earnings. Read our free research report to see why you should think twice about including RDNT in your portfolio, it’s free .

One Stock to Buy:

Axon (AXON)

Trailing 12-Month GAAP Operating Margin: 2.8%

Providing body cameras and tasers for first responders, AXON (NASDAQ:AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.