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.

Blink Charging (BLNK)

Trailing 12-Month GAAP Operating Margin: -158%

One of the first EV charging companies to go public, Blink Charging (NASDAQ: BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.

Why Is BLNK Not Exciting?

1. Issuance of new shares over the last five years caused its earnings per share to fall by 10.2% annually while its revenue grew
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $0.80 per share, Blink Charging trades at 0.6x forward price-to-sales. To fully understand why you should be careful with BLNK, check out our full research report (it’s free).

Beyond Meat (BYND)

Trailing 12-Month GAAP Operating Margin: -47.8%

A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ: BYND) is a food company specializing in alternatives to traditional meat products.

Why Do We Think BYND Will Underperform?

1. Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Beyond Meat’s stock price of $2.57 implies a valuation ratio of 0.5x forward price-to-sales. If you’re considering BYND for your portfolio, see our FREE research report to learn more.

Tilly's (TLYS)

Trailing 12-Month GAAP Operating Margin: -6.1%

With an emphasis on skate and surf culture, Tilly’s (NYSE: TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.

Why Should You Dump TLYS?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Sales were less profitable over the last five years as its earnings per share fell by 32.2% annually, worse than its revenue declines
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Tilly's is trading at $1.59 per share, or 0.1x forward price-to-sales. Read our free research report to see why you should think twice about including TLYS in your portfolio.

Stocks We Like More

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