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 two unprofitable companies that could turn today’s losses into long-term gains and one best left off your radar.

One Stock to Sell:

Clover Health (CLOV)

Trailing 12-Month GAAP Operating Margin: -2.6%

Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.

Why Does CLOV Fall Short?

1. Annual sales declines of 18.1% for the past two years show its products and services struggled to connect with the market during this cycle
2. Subscale operations are evident in its revenue base of $1.61 billion, meaning it has fewer distribution channels than its larger rivals
3. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

Clover Health’s stock price of $2.80 implies a valuation ratio of 17.4x forward P/E. Check out our free in-depth research report to learn more about why CLOV doesn’t pass our bar.

Two Stocks to Watch:

Fiverr (FVRR)

Trailing 12-Month GAAP Operating Margin: -3.9%

Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.

Why Does FVRR Stand Out?

1. Customer spending is rising as the company has focused on monetization over the last two years, leading to 20.5% annual growth in its average revenue per buyer
2. Additional sales over the last three years increased its profitability as the 59.8% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin increased by 13 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Fiverr is trading at $22.40 per share, or 9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

DraftKings (DKNG)

Trailing 12-Month GAAP Operating Margin: -6.2%

Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.

Why Do We Like DKNG?

1. Rapid growth in monthly unique players demonstrates strong market adoption
2. Expected revenue growth of 26.2% for the next year suggests its market share will rise
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 22.2% annually

At $34.45 per share, DraftKings trades at 24.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

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 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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

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