1 Cash-Heavy Stock with Solid Fundamentals and 2 to Steer Clear Of
A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Financial flexibility is valuable, but it's not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.
Net Cash Position: $696.3 million (7.7% of Market Cap)
Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.
Why Are We Hesitant About ESTC?
Poor expense management has led to operating losses
Projected 2.3 percentage point decline in its free cash flow margin next year reflects the company's plans to increase its investments to defend its market position
Elastic is trading at $87.75 per share, or 5.5x forward price-to-sales. Read our free research report to see why you should think twice about including ESTC in your portfolio, it's free.
Net Cash Position: $386.2 million (69% of Market Cap)
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE:KIND) is a social network that connects neighbors with each other and with local businesses.
Why Does KIND Worry Us?
Preference for prioritizing user growth over monetization has led to 1.1% annual drops in its average revenue per user
Suboptimal cost structure is highlighted by its history of EBITDA losses
Negative free cash flow raises questions about the return timeline for its investments
Nextdoor's stock price of $1.43 implies a valuation ratio of 2.6x forward price-to-gross profit. If you're considering KIND for your portfolio, see our FREE research report to learn more.
Net Cash Position: $1.32 billion (4.1% of Market Cap)
Started in 2006 by two MIT grad students, HubSpot (NYSE:HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.
Why Are We Fans of HUBS?
Customers view its software as mission-critical to their operations as its ARR has averaged 21.1% growth over the last year
Software is difficult to replicate at scale and leads to a best-in-class gross margin of 85%
Operating margin improvement of 6.7 percentage points over the last year demonstrates its ability to scale efficiently
At $618 per share, HubSpot trades at 10.7x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
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Hims & Hers Stock Is Soaring Again. But Should You Buy the Stock?
Hims & Hers stock is on the upswing after the company secured a weight-loss drug partnership. Hims & Hers is acquiring its way into Europe and wants to build more personalized drugs for its telehealth customers. Shares have soared, but still have a ton of potential for patient long-term shareholders. 10 stocks we like better than Hims & Hers Health › Many companies have failed to disrupt the complicated U.S. healthcare market. Hims & Hers (NYSE: HIMS) may finally be succeeding in cracking the code. The online telehealth platform focuses on circumventing the insurance market; its business of selling affordable medications directly to individuals is growing like a weed, and expects to generate $6.5 billion in revenue by 2030. It has had a tumultuous start to 2025, as Hims & Hers waged a battle to sell new weight loss medications on its online marketplace. Now, with momentum back on its side, the stock is up 118% year to date and 446% in the last five years. Let's take a deeper look at this company, and see whether you might want to buy Hims & Hers stock for your portfolio now. Hims & Hers' model is simple. It has two separate web platforms -- Hims for men and Hers for women -- that sell medications and deliver to customers' front doors. It began with sexual health, but has moved into dermatology, hair loss, mental health, and now weight loss medications. A key to its success has been avoiding the insurance market with products that don't break the bank. Customers loathe dealing with health insurers in the United States, and sometimes would rather not use insurance at all. Plus, some of these products aren't covered by insurance. This strategy has helped the company close in on over $2 billion in projected revenue in 2025. To keep up this impressive growth, Hims & Hers wants to offer weight loss medications, which have been a blockbuster set of drugs for the pharmaceutical market. For a while the popularity of these drugs, such as Novo Nordisk's Wegovy, left them in short supply; that allowed third parties such as Hims & Hers to produce them as a compounding pharmacy and sell them at much cheaper prices. This ended up generating $200 million of Hims & Hers' $1.4 billion in 2024 revenue. But with the shortage of Wegovy over and the compounding pharmacy exception ended, the company's weight-loss business was at a major turning point. Luckily, at the end of April Hims & Hers announced a partnership with Novo Nordisk that seems to resolve this issue: It gives Hims & Hers the ability to sell Wegovy directly on its platform. Hims & Hers is not an exclusive supplier of the drug -- or any drugs on its marketplaces, to be fair -- but it hopes to use its subscription business model, marketing expertise, and simplified user proposition to drive sales for Novo Nordisk in the huge obesity-care market. Besides weight loss drugs, Hims & Hers has more ambitions to reach its goal of $6.5 billion in revenue by 2030. Just recently, the company announced its intent to acquire European competitor Zava so it could expand its telehealth service to Europe. The acquisition will add a platform with 1.3 million active customers in the U.K., Germany, France, and Ireland. It makes sense that Hims & Hers can supercharge growth for the platform with its plethora of medications offered to customers, keen marketing skills, and subscription-based selling model. Over the long run, Hims & Hers aims to make healthcare for its customers more personalized. This includes unique drug combinations, its own outsourcing facility, and at-home testing capabilities. Details remain sparse, but the vision is clear: disrupting more and more of the trillions of dollars spent on healthcare by building a business that people actually enjoy interacting with. This is why 2.4 million active customers use Hims & Hers today. A revenue goal of $6.5 billion seems well within reach by 2030. Hims & Hers is only at 2.4 million active customers, and there are tens of millions of people in the United States alone who could start using or switch to one of its telehealth platforms. Add on the Zava acquisition in Europe, and the runway for growth gets even larger. The company has an impressive gross profit margin of 77%, which should lead to high levels of profitability at scale. On $6.5 billion in future revenue, it could very well post a net profit margin of over 20%, and achieve $1.5 billion in bottom-line profits and free cash flow. A 20% profit margin is easily achievable because of its high gross margins and the fact it currently spends 40% of revenue on marketing today, a figure that has come down over time and should come down even more as Hims & Hers keeps scaling. However, Hims & Hers has played fast and loose with laws and regulations in the past. It sold weight loss drugs when the legality of doing so was unclear, and although that dispute seems to have been resolved, management could easily start playing with fire again and burn its reputation as a trusted provider of medications. Otherwise, this looks like a fantastic growth stock that just doubled its addressable market with the Zava acquisition. Today, Hims & Hers has a market cap of $12.3 billion. You might think it's overvalued because of the stock's recent run-up in price, but the numbers show that patient investors could be rewarded by holding for the long term. A $12.3 billion market cap is only around 8 times my 2030 earnings estimate of $1.5 billion, which would be a dirt cheap price-to-earnings (P/E) ratio for a fast-growing company compared to the current market cap. Most likely, the stock will be valued at a higher multiple than 8, meaning that the stock will be higher in five years. It doesn't come without risks, but if you're a growth investor, you might love Hims & Hers stock for its long-term potential. Before you buy stock in Hims & Hers Health, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Hims & Hers Health wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Hims & Hers Health. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy. Hims & Hers Stock Is Soaring Again. But Should You Buy the Stock? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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A New Social Security Garnishment Is Set to Begin This Summer -- but There Are 2 Legal Ways Most Retirees Can Avoid It
Getting as much as possible out of Social Security isn't a luxury for most retirees -- it's an absolute necessity. This summer, the Trump administration will begin garnishing up to 15% of Social Security benefits for delinquent federal student loan borrowers. Two perfectly legal solutions exist that may allow a majority of tardy federal student loan borrowers to avoid having their Social Security checks garnished. The $23,760 Social Security bonus most retirees completely overlook › For most retirees, Social Security isn't just income that's deposited into their checking or savings account on a monthly basis. It represents a financial lifeline that many would likely struggle to make do without. In 2023, Social Security was responsible for lifting 22 million people above the federal poverty line, some 16.3 million of whom were adults aged 65 and above. Meanwhile, 23 years of annual surveys from national pollster Gallup find that up to 90% of retirees require their monthly benefit, to some degree, to make ends meet. Getting as much out of Social Security isn't a luxury -- it's often a necessity. But beginning sometime this summer, select retirees can expect their Social Security checks to shrink by up to 15%. For some of these beneficiaries, it's income they simply can't afford to lose. For well over six decades, the federal government has played a role in subsidizing and guaranteeing student loans. As of April 2025, the U.S. Department of Education (DOE) notes that 42.7 million Americans had a cumulative $1.6 trillion in federal student loans outstanding. However, the collection of federal student loan repayments was halted during the early stages of the COVID-19 pandemic (March 2020) and was simply never lifted. According to the DOE, more than 5 million borrowers haven't made a payment in 360 days, and another 4 million are between 91 and 180 days late on their monthly payments. While higher education student loans may sound like something that affects relatively younger Americans, they've become a prominent issue for retirees. Whereas the aggregate number of student loan borrowers under the age of 62 has declined by 1% from 2017 to 2023, the number of student loan borrowers aged 62 and above has surged 59% to approximately 2.7 million over the same period, based on data from the Consumer Financial Protection Bureau (CFPB). Per the CFPB, an estimated 452,000 of these senior borrowers have defaulted on their federal student loans and are likely receiving Social Security benefits. Since President Donald Trump took office in January, his administration has targeted perceived government fraud and is aiming to make federal operations more efficient. One of the many changes under Trump, vis-à-vis the Social Security Administration (SSA), is the reimplementation of Social Security garnishments for delinquent federal student loan borrowers. Beginning "sometime this summer," per Trump's administration, tardy borrowers receiving a Social Security benefit -- this applies to all types of beneficiaries (retired workers, survivors of deceased workers, and workers with disabilities) -- could see their payouts garnished by up to 15%. The one caveat to this garnishment is that recipients must be left with at least a $750 monthly Social Security benefit. Thus, if your normal payout is $825 per month, the maximum garnishment would be $75 per month instead of the flat 15%. Additionally, the Trump administration isn't planning to offer delinquent federal student loan borrowers a 65-day warning prior to potential garnishment, as has been customary in the past. Rather, communications sent out provide just 30 days' notice that garnishments are possible if borrowers are still in default. According to the CFPB, 37% of the Social Security beneficiaries who have a federal student loan outstanding (delinquent or not) currently rely on their monthly check from America's leading retirement program for 90% (or more) of their income. Even a 15% garnishment for defaulted borrowers in this category has the potential to be financially devastating. It goes without saying that the easiest way to avoid this new garnishment by the Trump administration is to not be in default on your federal student loan(s). But for the roughly 452,000 Social Security retirees set to be impacted by this change in policy, there are two under-the-radar yet perfectly legal solutions that should allow a majority to avoid having their payouts garnished. To begin with, some of these defaulted borrowers may qualify for the Total and Permanent Disability (TPD) discharge program, which cancels federal student loans and stops forced collections. As the CFPB pointed out in a January research report, the DOE entered into a data-matching agreement with the SSA in 2021 to automate the TPD eligibility and federal student loan cancellation processes for beneficiaries who become disabled prior to reaching full retirement age (currently age 67 for anyone born in or after 1960). However, this TPD application process is failing Social Security beneficiaries who become permanently disabled after they reach full retirement age. The CFPB notes that the onus of applying for a TPD discharge of their federal student loans and/or garnishment falls onto aged beneficiaries. Census survey data shows that approximately 22% of Social Security recipients with federal student loans report having a permanent disability, per the CFPB's report. Social Security retirees currently in default on their federal student loan(s) can also potentially avoid having their monthly check garnished by applying for a financial hardship with the DOE. Defaulted borrowers will be required to provide documentation of their income and qualifying expenses to the DOE. If an individual's qualifying expenses are larger than their documented income -- especially pertaining to a possible 15% garnishment of their Social Security payout -- the DOE will likely grant a financial hardship exemption. Based on data from the Federal Reserve Board's Survey of Household Economics and Decisionmaking, the CFPB estimates that a whopping 82% of Social Security beneficiaries currently in default on their federal student loans would qualify for the hardship exemption -- in other words, their qualified expenses would exceed their documented income. Yet, a 2015 Government Accountability Office report found that fewer than 10% of Social Security recipients with forced federal student loan collections applied for a hardship exemption. If delinquent borrowers were to simply apply for this financial hardship with the DOE, a majority would likely be granted it. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. A New Social Security Garnishment Is Set to Begin This Summer -- but There Are 2 Legal Ways Most Retirees Can Avoid It was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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1 Top Dow Dividend Stock to Buy for Passive Income in June
Verizon has a dividend yield of more than 6%, triple the average Dow stock. The telecom company produces lots of cash to cover its dividend and invest in growing its business. It has a strong balance sheet, giving it ample financial flexibility to fund its dividend and growth. 10 stocks we like better than Verizon Communications › The Dow Jones Industrial Average tracks 30 large, publicly traded blue chip stocks. These companies are some of the strongest and most well-known in the country. They tend to be lower-risk companies, most of which pay dividends. Because of that, Dow stocks can be a great choice for those seeking reliable dividend income. Of the 30 Dow stocks, Verizon (NYSE: VZ) stands out for its high dividend yield. At over 6%, it's more than triple the average dividend yield of Dow stocks (less than 2%). That makes the telecom giant an ideal dividend stock to buy for passive income this month. A high dividend yield can sometimes suggest that a company has a higher risk profile. However, that's not the case with Verizon. The telecom giant produces prodigious cash flows and boasts a rock-solid financial profile. Last year, Verizon generated $36.9 billion in cash flow from operations. It invested $17.1 billion into capital projects to maintain and expand its 5G and fiber networks. That left Verizon with $19.8 billion in free cash flow, which easily covered the company's $11.2 billion in dividend payments to shareholders. The remaining excess free cash flow enabled the telecom giant to strengthen its already solid balance sheet. Its leverage ratio fell from 2.6 times at the end of 2023 to 2.3 times at the end of last year. That's a solid leverage ratio for a company that generates stable cash flow. It backs the company's strong A-/BBB+/Baa1 bond ratings. Verizon's long-term goal is to have an even lower leverage ratio in the range of 1.75x to 2.0x, putting it on an even stronger financial foundation. Verizon's robust cash flows and strong financial profile have enabled the company to steadily increase its dividend. Last September, the company delivered its 18th consecutive annual dividend increase, raising its payment by around 2%. That's the longest current streak in the U.S. telecom sector. The company should be able to continue increasing its dividend in the future. It's investing heavily in 5G and fiber to provide faster wireless and broadband services to customers. That strategy is driving the company's financial growth this year. Its wireless services revenue rose 2.7% in the first quarter to an industry-leading $20.8 billion. Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 4% to $12.6 billion, the highest in the company's history. Verizon also produced $3.6 billion in free cash flow after capital expenses in the first quarter, a 34% jump compared to the year-ago period. Verizon has budgeted between $17.5 billion and $18.5 billion for capital expenditures this year to maintain and expand its network. That will leave it with $17.5 billion to $18.5 billion in free cash flow, more than enough to cover its dividend and continue strengthening its balance sheet. The company is using some of its financial flexibility to acquire Frontier Communications in a $20 billion all-cash deal that it hopes to close early next year. The acquisition will significantly expand its fiber network while generating at least $500 million in annual cost savings. Verizon will use its growing excess free cash flow to repay the debt it will take on to close that deal. It should return to its current level within two years of closing the acquisition. That would free up additional cash that Verizon could use to repurchase stock. The growing free cash flow from its capital investments and the Frontier deal should enable Verizon to continue to steadily increase its high-yielding dividend. Verizon is a rare high-yielding blue chip dividend stock. It provides investors with a bond-like income stream with some upside potential from a rising dividend and the possibility of an increasing stock price. These features make it an ideal option for those seeking a bankable income stream backed by a top Dow stock. Before you buy stock in Verizon Communications, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Verizon Communications wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Matt DiLallo has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy. 1 Top Dow Dividend Stock to Buy for Passive Income in June was originally published by The Motley Fool Sign in to access your portfolio
