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.
A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are two unprofitable companies that could turn today’s losses into long-term gains and one that may never reach the Promised Land.
One Stock to Sell:
IPG Photonics (IPGP)
Trailing 12-Month GAAP Operating Margin: -25.1%
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ: IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
Why Do We Avoid IPGP?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.3% annually over the last five years
- Inability to adjust its cost structure while its revenue declined over the last five years led to a 46.1 percentage point drop in the company’s operating margin
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 20.5% annually, worse than its revenue
IPG Photonics is trading at $83.22 per share, or 68.5x forward P/E. Dive into our free research report to see why there are better opportunities than IPGP.
Two Stocks to Buy:
Zscaler (ZS)
Trailing 12-Month GAAP Operating Margin: -4.8%
Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ: ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.
Why Should You Buy ZS?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Projected revenue growth of 22.6% for the next 12 months suggests its momentum from the last two years will persist
- Robust free cash flow margin of 27.2% gives it many options for capital deployment
Zscaler’s stock price of $313 implies a valuation ratio of 14.9x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Oscar Health (OSCR)
Trailing 12-Month GAAP Operating Margin: -1.2%
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Will OSCR Beat the Market?
- Impressive 47% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has massively outpaced its peers over the last four years as its EPS has compounded at 19.3% annually
At $20.48 per share, Oscar Health trades at 0.4x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even 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 6 Stocks for this week. 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-micro-cap company Tecnoglass (+1,754% 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
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