1 Cash-Heavy Stock with Exciting Potential and 2 to Avoid
A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Not all businesses with cash are winners, and that's why we built StockStory - to help you separate the good from the bad. That said, here is one company with a net cash position that balances growth with stability and two with hidden risks.
Net Cash Position: $80.24 million (15.2% of Market Cap)
Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.
Why Does EVGO Worry Us?
Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
Cash-burning history makes us doubt the long-term viability of its business model
Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
EVgo is trading at $3.95 per share, or 33.4x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why EVGO doesn't pass our bar.
Net Cash Position: $385.6 million (10.9% of Market Cap)
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE:KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Do We Think KFY Will Underperform?
Sales tumbled by 2% annually over the last two years, showing market trends are working against its favor during this cycle
Demand will likely be soft over the next 12 months as Wall Street's estimates imply tepid growth of 1.4%
Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
At $68.29 per share, Korn Ferry trades at 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than KFY.
Net Cash Position: $744,000 (0.1% of Market Cap)
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Is LMB on Our Radar?
Operating margin expansion of 5.3 percentage points over the last five years shows the company optimized its expenses
Incremental sales over the last two years have been highly profitable as its earnings per share increased by 53.3% annually, topping its revenue gains
Industry-leading 22.9% return on capital demonstrates management's skill in finding high-return investments, and its rising returns show it's making even more lucrative bets
Limbach's stock price of $127.50 implies a valuation ratio of 30.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth 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 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
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