Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. That said, here is one unprofitable company investing heavily to secure market share and two best left off your radar.
Two Stocks to Sell:
nLIGHT (LASR)
Trailing 12-Month GAAP Operating Margin: -24%
Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ: LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.
Why Do We Think LASR Will Underperform?
- Sales tumbled by 1.6% annually over the last two years, showing market trends are working against its favor during this cycle
- 6.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
nLIGHT’s stock price of $30.74 implies a valuation ratio of 6.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than LASR.
HA Sustainable Infrastructure Capital (HASI)
Trailing 12-Month GAAP Operating Margin: -5.6%
With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital (NYSE: HASI) is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.
Why Are We Hesitant About HASI?
- Incremental sales over the last five years were less profitable as its 8% annual earnings per share growth lagged its revenue gains
- ROE of 7.8% reflects management’s challenges in identifying attractive investment opportunities
- EBITDA losses may force it to accept punitive lending terms or high-cost debt
At $29.45 per share, HA Sustainable Infrastructure Capital trades at 10.4x forward P/E. Read our free research report to see why you should think twice about including HASI in your portfolio.
One Stock to Watch:
SoundHound AI (SOUN)
Trailing 12-Month GAAP Operating Margin: -183%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Do We Watch SOUN?
- Average billings growth of 202% over the last year enhances its liquidity and shows there is steady demand for its products
- Expected revenue growth of 42.4% for the next year suggests its market share will rise
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
SoundHound AI is trading at $17.84 per share, or 38.7x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
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-small-cap company Comfort Systems (+782% 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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