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.
Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. That said, here is one unprofitable company investing heavily to secure market share and two that may never reach the Promised Land.
Two Stocks to Sell:
Intel (INTC)
Trailing 12-Month GAAP Operating Margin: -4.5%
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Do We Avoid INTC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.3% annually over the last five years
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 34.9 percentage points
Intel is trading at $34.12 per share, or 81.6x forward P/E. Check out our free in-depth research report to learn more about why INTC doesn’t pass our bar.
Fluence Energy (FLNC)
Trailing 12-Month GAAP Operating Margin: -1.1%
Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ: FLNC) helps store renewable energy sources with battery systems.
Why Do We Think Twice About FLNC?
- Gross margin of 7.2% reflects its high production costs
- Investments to defend its competitive moat have ramped up over the last five years as its free cash flow margin decreased by 6.4 percentage points
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $17.03 per share, Fluence Energy trades at 61.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than FLNC.
One Stock to Buy:
JFrog (FROG)
Trailing 12-Month GAAP Operating Margin: -19.1%
Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ: FROG) provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.
Why Is FROG a Top Pick?
- Billings growth has averaged 22.9% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Robust free cash flow margin of 28% gives it many options for capital deployment
JFrog’s stock price of $58.07 implies a valuation ratio of 11.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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