1 Lucrative Stock to Consider This Week and 2 We Deem Risky

Profitable Companies Aren’t Always Built for the Long Haul

Just because a business is currently making money doesn’t guarantee its future success. Some companies depend on outdated strategies or temporary advantages, which may not sustain them in the long run.

While generating profits is important, it’s not the sole indicator of a company’s resilience. At StockStory, our mission is to help you spot businesses with genuine long-term potential. Below, we highlight one company that effectively balances growth and profitability, as well as two others that may face challenges ahead.

Stocks to Consider Selling

Golden Entertainment (GDEN)

Latest 12-Month GAAP Operating Margin: 5.5%

Golden Entertainment (NASDAQ: GDEN), established in 2001, operates casinos, taverns, and distributed gaming networks.

Why We’re Cautious About GDEN:

• Over the past five years, annual sales have declined by 2.5%, indicating shifting consumer preferences are working against the company.
• With a free cash flow margin of just 4.3% over the last two years, GDEN has limited flexibility to invest in growth or return value to shareholders.
• Returns on capital have dropped from an already low base, suggesting that both past and current management strategies have not delivered as intended.

Currently, Golden Entertainment trades at $27.18 per share, equating to a forward price-to-earnings ratio of 33.2.

Somnigroup (SGI)

Latest 12-Month GAAP Operating Margin: 9.3%

Somnigroup (NYSE: SGI) was formed in 2012 through the merger of Tempur-Pedic and Sealy, and is recognized for its innovative memory foam mattresses and sleep solutions.

Reasons to Be Wary of SGI:

• Annual revenue growth averaged just 14.3% over the past five years, trailing behind other consumer discretionary companies.
• Capital requirements are expected to rise in the coming year, with free cash flow margins projected to decrease by one percentage point.
• Returns on capital have continued to weaken from an already low starting point, highlighting ineffective investment decisions by management.

Somnigroup is priced at $90.79 per share, reflecting a forward P/E of 28.2.

A Stock Worth Buying

OSI Systems (OSIS)

Latest 12-Month GAAP Operating Margin: 12.6%

OSI Systems (NASDAQ: OSIS) develops and manufactures advanced electronic systems for security screening, patient monitoring, and optoelectronics, with products used in airports, border crossings, and hospitals worldwide.

Why OSIS Stands Out:

• Revenue has grown at an impressive 16.6% annually over the past two years, signaling increased market share.
• Profits have outpaced sales, with earnings per share rising by 23.4% per year during the same period.
• Free cash flow margin has improved by 2.4 percentage points over the last five years, providing the company with greater financial flexibility.

OSI Systems is currently valued at $284.60 per share, with a forward P/E of 25.5.

Top-Quality Stocks for Any Market Environment

Discover the standout companies featured in our Top 5 Growth Stocks for this month. This handpicked selection of High Quality stocks has delivered a remarkable 244% return over the past five years (as of June 30, 2025).

Our 2020 list included now well-known names like Nvidia, which soared by 1,326% from June 2020 to June 2025, as well as lesser-known companies such as Kadant, which achieved a 351% five-year return. Start your search for the next big winner with StockStory today.