Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.
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 may never reach the Promised Land.
Two Stocks to Sell:
Azenta (AZTA)
Trailing 12-Month GAAP Operating Margin: -28.8%
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Should You Sell AZTA?
- Sales tumbled by 4.3% annually over the last two years, showing market trends are working against it during this cycle
- Earnings per share have contracted by 24.8% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Cash-burning history makes us doubt the long-term viability of its business model
Azenta is trading at $27.32 per share, or 45.6x forward P/E. Read our free research report to see why you should think twice about including AZTA in your portfolio.
Peabody Energy (BTU)
Trailing 12-Month GAAP Operating Margin: -4%
Beginning with a single wagon hauling coal in Illinois back when Grover Cleveland was president, Peabody Energy (NYSE: BTU) mines coal used by electricity generators and steel manufacturers.
Why Is BTU Risky?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 2.7% annually over the last ten years
- Gross margin of 24.9% reflects its high production costs and unfavorable asset base
- Expenses have increased as a percentage of revenue over the last five years as its EBITDA margin fell by 25.1 percentage points
At $23.99 per share, Peabody Energy trades at 12x forward P/E. To fully understand why you should be careful with BTU, check out our full research report (it’s free).
One Stock to Buy:
Planet Labs (PL)
Trailing 12-Month GAAP Operating Margin: -31.9%
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
What Makes PL Stand Out?
- Backlog has averaged 143% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 48.9% over the last two years outstripped its revenue performance
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
Planet Labs’s stock price of $22.41 implies a valuation ratio of 376.7x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.
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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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
