3 Cash-Heavy Stocks Skating on Thin Ice

April 28, 2025 at 09:05 AM EDT

ASAN Cover Image

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 three companies with net cash positions to steer clear of and a few alternatives to consider.

Asana (ASAN)

Net Cash Position: $203.8 million (5.5% of Market Cap)

Founded in 2008 by Facebook’s co-founder Dustin Moskovitz, Asana (NYSE: ASAN) is a cloud-based project management software, where you can plan and assign tasks to employees and monitor and discuss progress of work.

Why Does ASAN Fall Short?

Offerings struggled to generate meaningful interest as its average billings growth of 9.4% over the last year did not impress
Net revenue retention rate of 97.5% shows it has a tough time retaining customers
Track record of operating losses stem from its decision to pursue growth instead of profits

Asana’s stock price of $15.98 implies a valuation ratio of 4.7x forward price-to-sales. Read our free research report to see why you should think twice about including ASAN in your portfolio.

Leonardo DRS (DRS)

Net Cash Position: $233 million (2.4% of Market Cap)

Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.

Why Is DRS Not Exciting?

3.9% annual revenue growth over the last four years was slower than its industrials peers
Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
Eroding returns on capital suggest its historical profit centers are aging

At $37.15 per share, Leonardo DRS trades at 34.9x forward price-to-earnings. If you’re considering DRS for your portfolio, see our FREE research report to learn more.

Exponent (EXPO)

Net Cash Position: $177.4 million (4.4% of Market Cap)

With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ: EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.

Why Do We Think Twice About EXPO?

Modest revenue base of $518.5 million gives it less fixed cost leverage and fewer distribution channels than larger companies
Earnings per share lagged its peers over the last two years as they only grew by 5.4% annually
Waning returns on capital imply its previous profit engines are losing steam

Exponent is trading at $79.22 per share, or 37.8x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than EXPO.

Stocks We Like More

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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 Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.

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3 Cash-Heavy Stocks Skating on Thin Ice

Asana (ASAN)

Leonardo DRS (DRS)

Exponent (EXPO)

Stocks We Like More

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