Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.
A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are three unprofitable companiesto steer clear of and a few better alternatives.
Intel (INTC)
Trailing 12-Month GAAP Operating Margin: -20.6%
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 Are We Out on INTC?
- Annual sales declines of 6.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Operating profits fell over the last five years as its sales dropped and it struggled to adjust its fixed costs
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 25 percentage points
Intel is trading at $20.08 per share, or 33.4x forward P/E. To fully understand why you should be careful with INTC, check out our full research report (it’s free).
fuboTV (FUBO)
Trailing 12-Month GAAP Operating Margin: -9.7%
Originally launched as a soccer streaming platform, fuboTV (NYSE: FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Are We Hesitant About FUBO?
- Performance surrounding its domestic subscribers has lagged its peers
- Suboptimal cost structure is highlighted by its history of operating losses
- Projected 10.8 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
At $3.26 per share, fuboTV trades at 129x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including FUBO in your portfolio.
Worthington (WOR)
Trailing 12-Month GAAP Operating Margin: -3.1%
Founded by a steel salesman, Worthington (NYSE: WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Why Should You Dump WOR?
- Annual sales declines of 19.4% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Worthington’s stock price of $57.59 implies a valuation ratio of 19.5x forward P/E. Check out our free in-depth research report to learn more about why WOR doesn’t pass our bar.
Stocks We Like More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
