Companies that burn cash at a rapid pace can run into serious trouble if they fail to secure funding. Without a clear path to profitability, these businesses risk dilution, mounting debt, or even bankruptcy.
Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. Keeping that in mind, here is one high-risk, high-reward company that could turn today’s losses into tomorrow’s gains and two that may struggle to stay afloat.
Two Stocks to Sell:
Stratasys (SSYS)
Trailing 12-Month Free Cash Flow Margin: -1.7%
Born from the Founder’s idea of making a toy frog with a glue gun, Stratasys (NASDAQ: SSYS) offers 3D printers and related materials, software, and services to many industries.
Why Are We Cautious About SSYS?
- Annual sales declines of 6.2% for the past two years show its products and services struggled to connect with the market during this cycle
- Poor expense management has led to operating margin losses
- Cash-burning history makes us doubt the long-term viability of its business model
Stratasys is trading at $8.09 per share, or 61.4x forward P/E. If you’re considering SSYS for your portfolio, see our FREE research report to learn more.
Sunrun (RUN)
Trailing 12-Month Free Cash Flow Margin: -9.7%
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ: RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Does RUN Fall Short?
- Suboptimal cost structure is highlighted by its history of operating margin losses
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $11.45 per share, Sunrun trades at 18.5x forward P/E. Check out our free in-depth research report to learn more about why RUN doesn’t pass our bar.
One Stock to Buy:
Super Micro (SMCI)
Trailing 12-Month Free Cash Flow Margin: -20.3%
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Why Are We Bullish on SMCI?
- Annual revenue growth of 68.9% over the last two years was superb and indicates its market share increased during this cycle
- Unparalleled revenue scale of $33.7 billion gives it an edge in distribution
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 57.5% annually
Super Micro’s stock price of $23.94 implies a valuation ratio of 8.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
