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

Two Stocks to Sell:

Ford (F)

Trailing 12-Month GAAP Operating Margin: -4.9%

Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.

Why Do We Avoid F?

1. The company has faced growth challenges as its 3.1% annual revenue increases over the last two years fell short of other industrials companies
2. Diminishing returns on capital suggest its earlier profit pools are drying up
3. High net-debt-to-EBITDA ratio of 10× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Ford’s stock price of $11.56 implies a valuation ratio of 7.3x forward P/E. If you’re considering F for your portfolio, see our FREE research report to learn more.

Peabody Energy (BTU)

Trailing 12-Month GAAP Operating Margin: -2.1%

Beginning with a single wagon hauling coal in Illinois back when Grover Cleveland was president, Peabody Energy (NYSE: BTU) mines coal used by electricity generators and steel manufacturers.

Why Do We Think BTU Will Underperform?

1. Sales tumbled by 3.7% annually over the last ten years, showing market trends are working against its favor during this cycle
2. High extraction costs and unfavorable asset economics are reflected in its low gross margin of 25.1%
3. Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 15.8 percentage points

At $32.98 per share, Peabody Energy trades at 11.7x forward P/E. Check out our free in-depth research report to learn more about why BTU doesn’t pass our bar.

One Stock to Buy:

Axon (AXON)

Trailing 12-Month GAAP Operating Margin: -2.2%

Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.

Why Will AXON Outperform?

1. ARR trends over the past two years show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Operating margin expanded by 17.2 percentage points over the last five years as it scaled and became more efficient
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 28.8% annually

Axon is trading at $426.90 per share, or 53.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

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.