1 Unprofitable Stock That Stand Out and 2 to Steer Clear Of
Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. That said, here is one unprofitable company investing heavily to secure market share and two that could struggle to survive.
Trailing 12-Month GAAP Operating Margin: -181%
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ:RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Is RUN Not Exciting?
Annual sales declines of 6.3% for the past two years show its products and services struggled to connect with the market during this cycle
Waning returns on capital from an already weak starting point displays the inefficacy of management's past and current investment decisions
Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Sunrun's stock price of $7.18 implies a valuation ratio of 9.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than RUN.
Trailing 12-Month GAAP Operating Margin: -51.2%
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 Give Us Pause?
Suboptimal cost structure is highlighted by its history of operating losses
Cash burn makes us question whether it can achieve sustainable long-term growth
Short cash runway increases the probability of a capital raise that dilutes existing shareholders
EVgo is trading at $2.83 per share, or 183.5x forward EV-to-EBITDA. If you're considering EVGO for your portfolio, see our FREE research report to learn more.
Trailing 12-Month GAAP Operating Margin: -3%
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
Why Is CRWD a Top Pick?
ARR trends over the last year show it's maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
Projected revenue growth of 21.1% for the next 12 months suggests its momentum from the last three years will persist
Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $429 per share, CrowdStrike trades at 22.3x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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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