The article identifies three profitable but potentially risky companies—Darden (DRI), Simpson (SSD), and Thermo Fisher (TMO)—that may not have sustainable business models due to weak growth, poor same-store sales, declining margins, and waning returns on capital. The authors caution investors against these stocks despite their profitability, emphasizing that profits do not guarantee long-term success. Instead, they recommend high-quality alternatives, including Nvidia and Comfort Systems, which have delivered strong five-year returns. The piece is framed as investment advice from StockStory, highlighting companies with real staying power.

Red Lobster filed for bankruptcy in May 2024 due to a combination of corporate mismanagement, rising operational costs, and structural challenges in the casual dining industry. Despite its historical success and cultural presence, the chain faced declining sales, increased seafood and labor costs, and repeated ownership changes. Key events included its sale to Golden Gate Capital in 2014, which added debt and led to real estate divestiture, and a subsequent sale to Thai Union, which intensified cost-cutting and supply dependency. The Endless Shrimp promotion, initially a cultural highlight, became a point of contention due to inflated shrimp costs. After years of financial strain, Red Lobster was rescued from bankruptcy in early 2024 by a new ownership group, though its long-term viability remains uncertain.

Texas Roadhouse overtook Olive Garden to become the top-selling US casual-dining chain in 2024, achieving a 13.8% year-over-year sales growth compared to Olive Garden's 0.8%. The chain reported $5.37 billion in revenue for 2024, with same-store sales up 5.8% and overall system sales rising 12.7%. It operates nearly 800 locations globally, including 660 in the US, 140 international, and 50 Bubba’s 33s and 14 Jaggers. Texas Roadhouse achieved a 9.61% operating margin in 2024, up from 7.64% in 2023, and posted strong free cash flow of $399 million in 2024. Despite rising commodity and labor costs, the company maintains a solid balance sheet with net cash and a return on equity of 32.3%. Analysts project revenue to reach $6.94 billion by 2027 and EPS to rise from $6.69 in 2025 to $8.48 in 2027. The stock trades at a forward P/E of 28.66x and EV/Sales of 2.19x, reflecting investor optimism, though valuation is considered premium. Key risks include inflationary pressure, competitive intensity, and economic downturns. The company is expanding with new store openings and franchise acquisitions, and rolling out digital kitchen systems to over 200 locations.

Darden Restaurants, Inc. (NYSE:DRI) insider Laura B Williamson sold 1,157 shares of the company's stock on July 30, 2025, at an average price of $204.70, totaling $236,837.90. This transaction reduced her position by 9.81%, leaving her with 10,632 shares valued at $2,176,370.40. The sale was disclosed to the SEC, and the company reported strong financial performance, including $2.98 EPS, $3.27 billion revenue, and a 2.9% dividend yield. Institutional investors also increased their holdings in DRI, and the company authorized a $1.00 billion stock buyback plan.

J. Safra Sarasin Holding AG reduced its stake in Darden Restaurants, Inc. by 1.5% in Q1 2025, selling 5,733 shares to own 384,939 shares. Darden accounts for 1.4% of the fund's portfolio, its 15th largest holding. Other investors, including Orion Portfolio Solutions LLC, Geode Capital Management LLC, and Huntington National Bank, increased their stakes. Darden reported $2.98 EPS for Q2 2025, exceeding analyst estimates, with revenue of $3.27 billion and a 10.6% year-over-year growth.