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 are two unprofitable companies with the potential to become industry leaders and one best left off your radar.
One Stock to Sell:
Upland (UPLD)
Trailing 12-Month GAAP Operating Margin: -4.4%
Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ: UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.
Why Do We Pass on UPLD?
- Sales tumbled by 4.4% annually over the last three years, showing industry trends like AI are working against its favor
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
At $2.22 per share, Upland trades at 0.3x forward price-to-sales. If you’re considering UPLD for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Braze (BRZE)
Trailing 12-Month GAAP Operating Margin: -20.6%
Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ: BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.
Why Do We Like BRZE?
- ARR growth averaged 26.8% over the last year, showing customers are willing to take multi-year bets on its offerings
- Customers use its software daily and increase their spending every year, as seen in its 114% net revenue retention rate
- Operating margin expanded by 10.1 percentage points over the last year as it scaled and became more efficient
Braze’s stock price of $35.38 implies a valuation ratio of 5.2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
agilon health (AGL)
Trailing 12-Month GAAP Operating Margin: -5.1%
Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.
Why Could AGL Be a Winner?
- Annual revenue growth of 40.5% over the past two years was outstanding, reflecting market share gains this cycle
- Business is winning new contracts that can potentially increase in value as its customer base averaged 34.7% growth over the past two years
- Earnings per share grew by 14.5% annually over the last three years and trumped its peers
agilon health is trading at $2.22 per share, or 0.1x forward price-to-sales. 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
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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.
