3 Profitable Stocks We Steer Clear Of

Barchart·06/22/2026 03:28:24

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

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 three profitable companies to avoid and some better opportunities instead.

Clorox (CLX)

Trailing 12-Month GAAP Operating Margin: 15.6%

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Why Does CLX Worry Us?

1. Annual revenue declines of 1.9% over the last three years indicate problems with its market positioning
2. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
3. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 5.8 percentage points

At $96.50 per share, Clorox trades at 15.8x forward P/E. Read our free research report to see why you should think twice about including CLX in your portfolio.

Lincoln Educational (LINC)

Trailing 12-Month GAAP Operating Margin: 6.1%

Established in 1946, Lincoln Educational (NASDAQ:LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce.

Why Do We Think LINC Will Underperform?

1. Demand for its offerings was relatively low as its number of enrolled students has underwhelmed
2. Negative free cash flow raises questions about the return timeline for its investments
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Lincoln Educational’s stock price of $48.43 implies a valuation ratio of 2.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than LINC.

PROG (PRG)

Trailing 12-Month GAAP Operating Margin: 15.4%

Evolving from its origins as Aaron's, Inc. before rebranding in 2020, PROG Holdings (NYSE:PRG) provides alternative payment solutions including lease-to-own options and second-look credit products for consumers who may not qualify for traditional financing.

Why Do We Steer Clear of PRG?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 5.4% annually
3. Annual tangible book value per share declines of 62.4% for the past five years show its capital management struggled during this cycle

PROG is trading at $38.43 per share, or 8.6x forward P/E. If you’re considering PRG for your portfolio, see our FREE research report to learn more.

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