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.
Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. Keeping that in mind, here is one unprofitable company that could turn today’s losses into long-term gains and two that may never reach the Promised Land.
Two Stocks to Sell:
Amtech (ASYS)
Trailing 12-Month GAAP Operating Margin: -7.7%
Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.
Why Should You Sell ASYS?
- Sales tumbled by 7.9% annually over the last two years, showing market trends are working against its favor during this cycle
- Poor expense management has led to operating margin losses
- Push for growth has led to negative returns on capital, signaling value destruction, and its decreasing returns suggest its historical profit centers are aging
Amtech is trading at $4.83 per share, or 17.9x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including ASYS in your portfolio.
ACV Auctions (ACVA)
Trailing 12-Month GAAP Operating Margin: -11.3%
Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
Why Does ACVA Fall Short?
- Gross margin of 25.1% reflects its high servicing costs
- Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.3% for the last two years
ACV Auctions’s stock price of $16.10 implies a valuation ratio of 30.1x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ACVA doesn’t pass our bar.
One Stock to Buy:
Natera (NTRA)
Trailing 12-Month GAAP Operating Margin: -12.4%
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Is NTRA a Top Pick?
- Average unit sales growth of 23.1% over the past two years reflects steady demand for its products
- Adjusted operating margin profits and efficiency rose over the last two years as it benefited from some fixed cost leverage
- Free cash flow flipped to positive over the last five years, indicating the company has achieved financial self-sustainability
At $161.01 per share, Natera trades at 10.4x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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).
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 Kadant (+351% 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
