Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

1 Cash-Heavy Stock with Solid Fundamentals and 2 to Steer Clear Of

HUBS Cover Image

A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.

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 is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.

Two Stocks to Sell:

Elastic (ESTC)

Net Cash Position: $696.3 million (7.7% of Market Cap)

Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE: ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.

Why Are We Hesitant About ESTC?

  1. Poor expense management has led to operating losses
  2. Projected 2.3 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position

Elastic is trading at $87.75 per share, or 5.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ESTC.

Nextdoor (KIND)

Net Cash Position: $386.2 million (69% of Market Cap)

Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE: KIND) is a social network that connects neighbors with each other and with local businesses.

Why Does KIND Worry Us?

  1. Preference for prioritizing user growth over monetization has led to 1.1% annual drops in its average revenue per user
  2. Suboptimal cost structure is highlighted by its history of EBITDA losses
  3. Negative free cash flow raises questions about the return timeline for its investments

Nextdoor’s stock price of $1.43 implies a valuation ratio of 2.6x forward price-to-gross profit. Check out our free in-depth research report to learn more about why KIND doesn’t pass our bar.

One Stock to Watch:

HubSpot (HUBS)

Net Cash Position: $1.32 billion (4.1% of Market Cap)

Started in 2006 by two MIT grad students, HubSpot (NYSE: HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.

Why Are We Fans of HUBS?

  1. Customers view its software as mission-critical to their operations as its ARR has averaged 21.1% growth over the last year
  2. Software is difficult to replicate at scale and leads to a best-in-class gross margin of 85%
  3. Operating margin improvement of 6.7 percentage points over the last year demonstrates its ability to scale efficiently

At $618 per share, HubSpot trades at 10.7x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.

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