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.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here is one high-risk, high-reward company that could turn today’s losses into tomorrow’s gains and two that could run into serious trouble.
Two Stocks to Sell:
Blink Charging (BLNK)
Trailing 12-Month Free Cash Flow Margin: -51.1%
One of the first EV charging companies to go public, Blink Charging (NASDAQ: BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.
Why Does BLNK Worry Us?
- Muted 5.4% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Cash-burning history makes us doubt the long-term viability of its business model
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Blink Charging’s stock price of $1.82 implies a valuation ratio of 1.6x forward price-to-sales. To fully understand why you should be careful with BLNK, check out our full research report (it’s free).
Enviri (NVRI)
Trailing 12-Month Free Cash Flow Margin: -3.1%
Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE: NVRI) offers steel and waste handling services.
Why Is NVRI Risky?
- Sales trends were unexciting over the last two years as its 2.7% annual growth was below the typical industrials company
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $12.25 per share, Enviri trades at 3.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why NVRI doesn’t pass our bar.
One Stock to Buy:
WEBTOON (WBTN)
Trailing 12-Month Free Cash Flow Margin: -2.3%
Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ: WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.
Why Will WBTN Beat the Market?
- 7.5% annual revenue growth over the last two years surpassed the sector average as its services resonated with customers
- Market share is on track to rise over the next 12 months as its 13.5% projected revenue growth implies demand will accelerate from its two-year trend
- Additional sales over the last two years increased its profitability as the 79.7% annual growth in its earnings per share outpaced its revenue
WEBTOON is trading at $18.50 per share, or 57.6x 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
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Take advantage of the rebound by checking out our Top 5 Strong Momentum 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).
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