Latest news with #unprofitablecompanies
Yahoo
7 days ago
- Business
- Yahoo
3 Unprofitable Stocks We're Skeptical 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. Keeping that in mind, here are three unprofitable companiesto avoid and some better opportunities instead. ChargePoint (CHPT) Trailing 12-Month GAAP Operating Margin: -58.8% The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE:CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe. Why Does CHPT Worry Us? Annual sales declines of 11.2% for the past two years show its products and services struggled to connect with the market during this cycle Cash-burning tendencies make us wonder if it can sustainably generate shareholder value Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders At $9.70 per share, ChargePoint trades at 10.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CHPT. AMC Entertainment (AMC) Trailing 12-Month GAAP Operating Margin: -2.6% With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE:AMC) operates movie theaters primarily in the US and Europe. Why Is AMC Not Exciting? Products and services aren't resonating with the market as its revenue declined by 2.7% annually over the last five years Negative free cash flow raises questions about the return timeline for its investments Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders AMC Entertainment is trading at $2.86 per share, or 2.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including AMC in your portfolio, it's free. Owens & Minor (OMI) Trailing 12-Month GAAP Operating Margin: -2% With roots dating back to 1882 and operations spanning approximately 80 countries, Owens & Minor (NYSE:OMI) is a healthcare solutions company that manufactures medical supplies, distributes products to healthcare providers, and delivers medical equipment directly to patients. Why Does OMI Fall Short? Sizable revenue base leads to growth challenges as its 3.2% annual revenue increases over the last two years fell short of other healthcare companies Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam Eroding returns on capital from an already low base indicate that management's recent investments are destroying value Owens & Minor's stock price of $6.53 implies a valuation ratio of 3.6x forward P/E. If you're considering OMI for your portfolio, see our FREE research report to learn more. High-Quality Stocks for All Market Conditions Trump's April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines. Take advantage of the rebound 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
Bloomberg
28-07-2025
- Business
- Bloomberg
Citadel Securities' Audacious Market Call Is Spot On
With global stocks hitting record highs and meme trades making a comeback, investors are naturally asking if it's time to take profit. Some institutional managers are going a step further, shorting shares of unprofitable US tech companies that have seen sharp upswings. Before talking about froth, one must ask if we are witnessing a structural change in the market. After all, if a different cohort is dominating trading, lofty valuations by historical standards can no longer predict future pullbacks.
Yahoo
18-05-2025
- Business
- Yahoo
We're Keeping An Eye On PMV Pharmaceuticals' (NASDAQ:PMVP) Cash Burn Rate
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. So should PMV Pharmaceuticals (NASDAQ:PMVP) shareholders be worried about its cash burn? For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. Let's start with an examination of the business' cash, relative to its cash burn. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. In March 2025, PMV Pharmaceuticals had US$160m in cash, and was debt-free. Looking at the last year, the company burnt through US$53m. Therefore, from March 2025 it had 3.0 years of cash runway. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below. View our latest analysis for PMV Pharmaceuticals PMV Pharmaceuticals didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. So while we can't look to sales to understand growth, we can look at how the cash burn is changing to understand how expenditure is trending over time. As it happens, the company's cash burn reduced by 8.2% over the last year, which suggests that management are maintaining a fairly steady rate of business development, albeit with a slight decrease in spending. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years. Even though it has reduced its cash burn recently, shareholders should still consider how easy it would be for PMV Pharmaceuticals to raise more cash in the future. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate). PMV Pharmaceuticals has a market capitalisation of US$45m and burnt through US$53m last year, which is 119% of the company's market value. Given just how high that expenditure is, relative to the company's market value, we think there's an elevated risk of funding distress, and we would be very nervous about holding the stock. Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought PMV Pharmaceuticals' cash runway was relatively promising. Even though we don't think it has a problem with its cash burn, the analysis we've done in this article does suggest that shareholders should give some careful thought to the potential cost of raising more money in the future. On another note, we conducted an in-depth investigation of the company, and identified 3 warning signs for PMV Pharmaceuticals (1 is significant!) that you should be aware of before investing here. If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. 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
Yahoo
18-05-2025
- Business
- Yahoo
We're Keeping An Eye On PMV Pharmaceuticals' (NASDAQ:PMVP) Cash Burn Rate
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. So should PMV Pharmaceuticals (NASDAQ:PMVP) shareholders be worried about its cash burn? For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. Let's start with an examination of the business' cash, relative to its cash burn. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. In March 2025, PMV Pharmaceuticals had US$160m in cash, and was debt-free. Looking at the last year, the company burnt through US$53m. Therefore, from March 2025 it had 3.0 years of cash runway. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below. View our latest analysis for PMV Pharmaceuticals PMV Pharmaceuticals didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. So while we can't look to sales to understand growth, we can look at how the cash burn is changing to understand how expenditure is trending over time. As it happens, the company's cash burn reduced by 8.2% over the last year, which suggests that management are maintaining a fairly steady rate of business development, albeit with a slight decrease in spending. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years. Even though it has reduced its cash burn recently, shareholders should still consider how easy it would be for PMV Pharmaceuticals to raise more cash in the future. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate). PMV Pharmaceuticals has a market capitalisation of US$45m and burnt through US$53m last year, which is 119% of the company's market value. Given just how high that expenditure is, relative to the company's market value, we think there's an elevated risk of funding distress, and we would be very nervous about holding the stock. Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought PMV Pharmaceuticals' cash runway was relatively promising. Even though we don't think it has a problem with its cash burn, the analysis we've done in this article does suggest that shareholders should give some careful thought to the potential cost of raising more money in the future. On another note, we conducted an in-depth investigation of the company, and identified 3 warning signs for PMV Pharmaceuticals (1 is significant!) that you should be aware of before investing here. If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
