While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.

Two Stocks to Sell:

Papa John's (PZZA)

Trailing 12-Month Free Cash Flow Margin: 4%

Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

Why Do We Pass on PZZA?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 12.1%
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 3.6 percentage points

At $42.39 per share, Papa John's trades at 24.9x forward P/E. Check out our free in-depth research report to learn more about why PZZA doesn’t pass our bar.

PepsiCo (PEP)

Trailing 12-Month Free Cash Flow Margin: 7.8%

With a history that goes back more than a century, PepsiCo (NASDAQ: PEP) is a household name in food and beverages today and best known for its flagship soda.

Why Do We Think Twice About PEP?

1. Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
2. Estimated sales growth of 3.8% for the next 12 months is soft and implies weaker demand
3. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 2.4 percentage points

PepsiCo’s stock price of $146.93 implies a valuation ratio of 17.4x forward P/E. Dive into our free research report to see why there are better opportunities than PEP.

One Stock to Watch:

Grid Dynamics (GDYN)

Trailing 12-Month Free Cash Flow Margin: 6.7%

With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.

Why Does GDYN Stand Out?

1. Impressive 29.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Earnings per share have massively outperformed its peers over the last five years, increasing by 22.2% annually
3. Improving returns on capital suggest its past investments are beginning to deliver value

Grid Dynamics is trading at $9.62 per share, or 22.2x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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

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.