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 that don’t make the cut and some better choices instead.
Box (BOX)
Net Cash Position: $1.5 million (0% of Market Cap)
Founded in 2005 by Aaron Levie and Dylan Smith, Box (NYSE: BOX) provides organizations with software to securely store, share and collaborate around work documents in the cloud.
Why Do We Think Twice About BOX?
- Annual revenue growth of 7.6% over the last three years was well below our standards for the software sector
- Average billings growth of 4.7% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 5.4% for the next 12 months implies demand will slow from its three-year trend
At $31.97 per share, Box trades at 4.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than BOX.
Bark (BARK)
Net Cash Position: $28.82 million (12.8% of Market Cap)
Making a name for itself with the BarkBox, Bark (NYSE: BARK) specializes in subscription-based, personalized pet products.
Why Does BARK Worry Us?
- Number of orders has disappointed over the past two years, indicating weak demand for its offerings
- Suboptimal cost structure is highlighted by its history of operating losses
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.3% for the last two years
Bark’s stock price of $1.29 implies a valuation ratio of 100.2x forward P/E. Read our free research report to see why you should think twice about including BARK in your portfolio.
Supernus Pharmaceuticals (SUPN)
Net Cash Position: $402.8 million (21.7% of Market Cap)
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Why Are We Out on SUPN?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Smaller revenue base of $668 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Supernus Pharmaceuticals is trading at $33.20 per share, or 16.1x forward P/E. Check out our free in-depth research report to learn more about why SUPN doesn’t pass our bar.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 176% over the last five years.
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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
