Over the past six months, Icahn Enterprises’s stock price fell to $8.42. Shareholders have lost 19.2% of their capital, which is disappointing considering the S&P 500 has climbed by 6.4%. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Is now the time to buy Icahn Enterprises, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is Icahn Enterprises Not Exciting?

Even with the cheaper entry price, we don't have much confidence in Icahn Enterprises. Here are three reasons why there are better opportunities than IEP and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Icahn Enterprises’s 5.3% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector.

2. Low Gross Margin Reveals Weak Structural Profitability

At StockStory, we prefer high gross margin businesses because they indicate the company has pricing power or differentiated products, giving it a chance to generate higher operating profits.

Icahn Enterprises has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 8.5% gross margin over the last five years. That means Icahn Enterprises paid its suppliers a lot of money ($91.45 for every $100 in revenue) to run its business.

3. Short Cash Runway Exposes Shareholders to Potential Dilution

As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.

Icahn Enterprises burned through $47 million of cash over the last year, and its $6.62 billion of debt exceeds the $3.78 billion of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

Unless the Icahn Enterprises’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.

We remain cautious of Icahn Enterprises until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.

Final Judgment

Icahn Enterprises’s business quality ultimately falls short of our standards. Following the recent decline, the stock trades at $8.42 per share (or a forward price-to-sales ratio of 0.5×). The market typically values companies like Icahn Enterprises based on their anticipated profits for the next 12 months, but there aren’t enough published estimates to arrive at a reliable number. You should avoid this stock for now - better opportunities lie elsewhere. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.

Stocks We Like More Than Icahn Enterprises

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 6 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.