A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here are three companies with net cash positions to steer clear of and a few alternatives to consider.
GameStop (GME)
Net Cash Position: $4.43 billion (43.4% of Market Cap)
Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE: GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.
Why Do We Think GME Will Underperform?
- GameStop’s brick-and-mortar engine keeps stalling as gamers migrate to digital downloads, and management is closing more outlets after shuttering hundreds of stores last year
- The share price remains an unpredictable meme-stock roller-coaster, and the purchase of thousands of Bitcoins have fueled huge swings
- On the bright side, the company has a large cash pile that gives CEO Ryan Cohen room to buy more Bitcoin or fund its collectibles and trading-card push
GameStop’s stock price of $22.86 implies a valuation ratio of 26.2x forward P/E. To fully understand why you should be careful with GME, check out our full research report (it’s free for active Edge members).
Advanced Energy (AEIS)
Net Cash Position: $128.1 million (1.7% of Market Cap)
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ: AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Should You Sell AEIS?
- Annual sales declines of 5.9% for the past two years show its products and services struggled to connect with the market during this cycle
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 9.9% annually, worse than its revenue
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Advanced Energy is trading at $196.60 per share, or 32.6x forward P/E. If you’re considering AEIS for your portfolio, see our FREE research report to learn more.
Ibotta (IBTA)
Net Cash Position: $225.1 million (24.3% of Market Cap)
Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE: IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.
Why Are We Wary of IBTA?
- Smaller revenue base of $367.6 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Forecasted revenue decline of 10.9% for the upcoming 12 months implies demand will fall off a cliff
At $32.61 per share, Ibotta trades at 40.3x forward P/E. Dive into our free research report to see why there are better opportunities than IBTA.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
