A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Upwork (UPWK)
Trailing 12-Month Free Cash Flow Margin: 22.3%
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Does UPWK Fall Short?
- Lackluster 6.6% annual revenue growth over the last three years indicates the company is losing ground to competitors
- Sales are projected to tank by 8.8% over the next 12 months as demand evaporates
Upwork is trading at $8.26 per share, or 3.9x forward EV/EBITDA. Read our free research report to see why you should think twice about including UPWK in your portfolio.
FactSet (FDS)
Trailing 12-Month Free Cash Flow Margin: 28.6%
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
Why Are We Cautious About FDS?
- Sales trends were unexciting over the last two years as its 6% annual growth was below the typical financials company
- Annual earnings per share growth of 4.7% underperformed its revenue over the last two years, showing its incremental sales were less profitable
FactSet’s stock price of $272.04 implies a valuation ratio of 14.1x forward P/E. Check out our free in-depth research report to learn more about why FDS doesn’t pass our bar.
One Stock to Watch:
GitLab (GTLB)
Trailing 12-Month Free Cash Flow Margin: 21.4%
With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ: GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.
Why Are We Fans of GTLB?
- Impressive 25.9% annual revenue growth over the last two years indicates it’s winning market share
- ARR growth averaged 23.3% over the last year, showing customers are willing to take multi-year bets on its software
- Software is difficult to replicate at scale and leads to a best-in-class gross margin of 85.9%
At $51.72 per share, GitLab trades at 7.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
