Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.

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 are three unprofitable companiesto avoid and some better opportunities instead.

Asana (ASAN)

Trailing 12-Month GAAP Operating Margin: -33.1%

Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.

Why Does ASAN Worry Us?

1. Average billings growth of 4.3% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 96.3% net revenue retention rate
3. Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential

Asana’s stock price of $13.70 implies a valuation ratio of 4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ASAN.

Soho House (SHCO)

Trailing 12-Month GAAP Operating Margin: -2.3%

Boasting fancy locations in hubs such as NYC and Miami, Soho House (NYSE: SHCO) is a global hospitality brand offering exclusive private member clubs, hotels, and restaurants.

Why Do We Pass on SHCO?

1. Performance surrounding its members has lagged its peers
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. High net-debt-to-EBITDA ratio of 16× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Soho House is trading at $8.79 per share, or 9.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SHCO doesn’t pass our bar.

Moderna (MRNA)

Trailing 12-Month GAAP Operating Margin: -106%

Rising to global prominence during the COVID-19 pandemic with one of the first effective vaccines, Moderna (NASDAQ: MRNA) develops messenger RNA (mRNA) medicines that direct the body's cells to produce proteins with therapeutic or preventive benefits for various diseases.

Why Do We Steer Clear of MRNA?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 46.3% annually over the last two years
2. 242.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $26.90 per share, Moderna trades at 5.5x forward price-to-sales. To fully understand why you should be careful with MRNA, check out our full research report (it’s free).

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 Comfort Systems (+782% 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.