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.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here is one company with a net cash position that can continue growing sustainably and two with hidden risks.
Two Stocks to Sell:
Vimeo (VMEO)
Net Cash Position: $300.1 million (23.2% of Market Cap)
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ: VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Does VMEO Fall Short?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Subscale operations are evident in its revenue base of $415.4 million, meaning it has fewer distribution channels than its larger rivals
- Negative returns on capital show management lost money while trying to expand the business
Vimeo is trading at $7.78 per share, or 35.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including VMEO in your portfolio.
MarketAxess (MKTX)
Net Cash Position: $435 million (6.8% of Market Cap)
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ: MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
Why Does MKTX Give Us Pause?
- Muted 6.4% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
At $172.10 per share, MarketAxess trades at 22.7x forward P/E. If you’re considering MKTX for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Dynatrace (DT)
Net Cash Position: $1.26 billion (8.4% of Market Cap)
With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace (NYSE: DT) provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments.
Why Do We Like DT?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 18.9% over the last year
- Software is difficult to replicate at scale and leads to a premier gross margin of 81.9%
- Robust free cash flow margin of 26.2% gives it many options for capital deployment
Dynatrace’s stock price of $49.60 implies a valuation ratio of 7.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive 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 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 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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