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".

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are two profitable companies that balance growth and profitability and one that may face some trouble.

One Stock to Sell:

Knight-Swift Transportation (KNX)

Trailing 12-Month GAAP Operating Margin: 3.9%

Covering 1.6 billion loaded miles in 2023 alone, Knight-Swift Transportation (NYSE:KNX) offers less-than-truckload and full truckload delivery services.

Why Should You Sell KNX?

1. Sales trends were unexciting over the last two years as its 1.2% annual growth was below the typical industrials company

2. Free cash flow margin shrank by 9.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Knight-Swift Transportation’s stock price of $39.17 implies a valuation ratio of 20x forward price-to-earnings. Read our free research report to see why you should think twice about including KNX in your portfolio, it’s free .

Two Stocks to Buy:

Inter Parfums (IPAR)

Trailing 12-Month GAAP Operating Margin: 18.9%

With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ:IPAR) manufactures and distributes fragrances worldwide.

Why Should You Buy IPAR?

1. Remarkable 18.2% revenue growth over the last three years demonstrates its ability to capture significant market share

2. Unique products and pricing power lead to a top-tier gross margin of 58.7%

3. Free cash flow margin grew by 5.1 percentage points over the last year, giving the company more chips to play with

Inter Parfums is trading at $108.75 per share, or 20.4x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free .

HEICO (HEI)

Trailing 12-Month GAAP Operating Margin: 21.8%

Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

Why Is HEI a Top Pick?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 9.6% over the past two years

2. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 24.9% annually

3. Strong free cash flow margin of 17.8% enables it to reinvest or return capital consistently