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. That said, here are two companies with net cash positions that can continue growing sustainably and one best left off your watchlist.
One Stock to Sell:
Electronic Arts (EA)
Net Cash Position: $764 million (1.9% of Market Cap)
Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ: EA) is one of the world’s largest video game publishers.
Why Does EA Give Us Pause?
- Muted 2.1% annual revenue growth over the last three years shows its demand lagged behind its consumer internet peers
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Costs have risen faster than its revenue over the last few years, causing its EBITDA margin to decline by 8.1 percentage points
Electronic Arts is trading at $157.73 per share, or 15.7x forward EV/EBITDA. If you’re considering EA for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Nvidia (NVDA)
Net Cash Position: $43.71 billion (1.1% of Market Cap)
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Will NVDA Outperform?
- Market share has increased this cycle as its 140% annual revenue growth over the last two years was exceptional
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Nvidia’s stock price of $157.56 implies a valuation ratio of 33.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
QuinStreet (QNST)
Net Cash Position: $73.82 million (8.2% of Market Cap)
Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ: QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.
Why Is QNST a Top Pick?
- Annual revenue growth of 31.4% over the past two years was outstanding, reflecting market share gains this cycle
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 103% annually
At $16 per share, QuinStreet trades at 14.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our 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 ServiceNow (+178% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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
