A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, here are two cash-producing companies that excel at turning cash into shareholder value and one that may struggle to keep up.
One Stock to Sell:
Zoom (ZM)
Trailing 12-Month Free Cash Flow Margin: 41.7%
Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ: ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.
Why Do We Pass on ZM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 3.9% average billings growth over the last year was weak
- Platform has low switching costs as its net revenue retention rate of 98% demonstrates high turnover
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.6%
At $86.92 per share, Zoom trades at 5.3x forward price-to-sales. To fully understand why you should be careful with ZM, check out our full research report (it’s free for active Edge members).
Two Stocks to Watch:
Shopify (SHOP)
Trailing 12-Month Free Cash Flow Margin: 17.8%
Starting with just three people selling snowboards online in 2004, Shopify (NYSE: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
Why Will SHOP Outperform?
- Billings have averaged 30.8% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Expected revenue growth of 24.9% for the next year suggests its market share will rise
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
Shopify is trading at $161.10 per share, or 15.9x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Celsius (CELH)
Trailing 12-Month Free Cash Flow Margin: 24.6%
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Should CELH Be on Your Watchlist?
- Annual revenue growth of 54.2% over the past three years was outstanding, reflecting market share gains
- Earnings per share have massively outperformed its peers over the last three years, increasing by 321% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
Celsius’s stock price of $42.08 implies a valuation ratio of 29.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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 6 Stocks for this week. 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 Comfort Systems (+782% 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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