The strongest companies can sometimes see their stock prices fall, but companies that can sustain improving revenue and profits over many years are unstoppable. 

Tesla (TSLA 0.53%) and Netflix (NFLX 1.34%) have been homerun investments for shareholders over the last decade, but don't make the mistake of believing these stocks can't go higher. These companies are leading their respective markets with solid brand power and superior business models that produce above-average margins compared to the competition.

Tesla and Netflix recently reported earnings results that sent their stocks down, but here's why these two unstoppable stocks are still worth buying.

1. Tesla

Share prices of Tesla are down about 10% since the company reported earnings results on July 19. Tesla reported a solid quarter, with a healthy profit on top of robust revenue growth. The post-earnings dip appears to be related to management's expectation for a slight decline in production in the third quarter. 

While the stock's high forward price-to-earnings ratio of 75 certainly accounts for a lot of future growth and looks expensive, Tesla continues to justify that high valuation. Revenue grew 46% year over year, which is an incredible performance during one of the worst environments for auto sales in more than a decade. CEO Elon Musk said the Model Y was the best-selling vehicle of any kind in the first quarter, which means it's selling better than vehicles that are substantially cheaper. That speaks volumes about Tesla's brand strength.

Most importantly, it continues to reduce costs and maintain industry-leading margins. Despite price cuts, Tesla still posted a healthy 10% operating margin, which is far superior to that of the rest of the auto industry. The guidance for lower production next quarter is not related to demand, but rather to factory upgrades the company is implementing.

Tesla's revenue growth and operating margin are above average for the auto industry.

Image source: Tesla.

What's more, investors continue to overlook the margin improvement happening in Tesla's services business, including revenue from its supercharger stations, which grew 47% year over year. This was a money-losing segment a few years ago, but just posted its fifth consecutive quarter of positive gross margin

Tesla's adjusted earnings per share grew 20% year over year, with free cash flow up 62%. This leading electric vehicle brand is proving it can still sell a lot of vehicles in a slow industry while keeping its margins healthy. If you don't own the stock or have a small position, the recent dip is a good opportunity to buy shares. Management is guiding for vehicle production of 1.8 million this year, but it still believes Tesla can one day make 20 million vehicles per year.

2. Netflix

Netflix stock has also traded lower since the company reported second-quarter earnings recently. While the stock is not as cheap as it was a year ago, it still offers long-term upside. Its recent quarter shows why it's still the favorite to win a sizable share of new households over the long term.

Revenue grew 2.7% year over year, which isn't typically the growth we see from growth stocks, but Netflix saw accelerating momentum and should see revenue, subscriber, and earnings growth improve in the coming quarters.

Indeed, global paid memberships accelerated to 8% year over year. The accelerating subscriber count shows a successful effort to force users who have been getting a free ride on someone else's account to pay up for a subscription. The company is also seeing success with its new ad-supported membership plan. These initiatives are expected to boost average revenue per subscriber, and therefore improve top-line growth heading into 2024. 

Most importantly, earnings per share grew 14% over the previous quarter, and with management anticipating further margin expansion, Netflix has good prospects to deliver more earnings growth to send the stock even higher. Analysts expect Netflix to grow earnings about 24% per year over the next five years. 

Some investors might have worried that forcing members to pay up might slow the company's growth, but that didn't happen. The accelerating subscriber growth shows that people are willing to pay up for a membership, which says a lot about Netflix's content offering.

A big advantage for Netflix is that it generates a superior operating profit margin of 22%, while other streaming services are losing money. Netflix is reinvesting those industry-leading profits to make content across many genres to satisfy everyone, and it's working. It's telling that Walt Disney's Disney+ reported a decline of 4 million subscribers in the most recent quarter, while Netflix continues to grow.

There are an estimated 1.3 billion broadband households around the world, according to Statista, and that number has been growing in recent years. Until Netflix's paid memberships approach that number, I wouldn't underestimate its growth potential. Like Tesla, it has an enormous financial advantage over the competition to maintain its lead, invest in new initiatives, and deliver the growth to send its stock higher over many years.