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.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are three unprofitable companiesthat don’t make the cut and some better opportunities instead.

ThredUp (TDUP)

Trailing 12-Month GAAP Operating Margin: -7.8%

Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.

Why Do We Think TDUP Will Underperform?

1. Sluggish trends in its orders suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Historical operating margin losses point to an inefficient cost structure
3. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

At $8.42 per share, ThredUp trades at 64.9x forward EV-to-EBITDA. If you’re considering TDUP for your portfolio, see our FREE research report to learn more.

AMC Networks (AMCX)

Trailing 12-Month GAAP Operating Margin: -3%

Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.

Why Should You Sell AMCX?

1. Products and services aren't resonating with the market as its revenue declined by 3.9% annually over the last five years
2. Free cash flow margin is on track to jump by 1.5 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

AMC Networks’s stock price of $9.72 implies a valuation ratio of 7x forward P/E. Check out our free in-depth research report to learn more about why AMCX doesn’t pass our bar.

Albany (AIN)

Trailing 12-Month GAAP Operating Margin: -3.6%

Founded in 1895, Albany (NYSE: AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.

Why Should You Dump AIN?

1. Muted 2.5% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.9 percentage points
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Albany is trading at $51.28 per share, or 17.4x forward P/E. Dive into our free research report to see why there are better opportunities than AIN.

Stocks We Like More

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