While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth. A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.
Just because a company is spending heavily doesn’t mean it’s on the right track, and StockStory is here to separate the winners from the losers. That said, here is one high-risk, high-reward company with the potential to scale into a market leader and two that may struggle to stay afloat.
Two Stocks to Sell:
Beyond Meat (BYND)
Trailing 12-Month Free Cash Flow Margin: -33.6%
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ: BYND) is a food company specializing in alternatives to traditional meat products.
Why Are We Out on BYND?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Beyond Meat is trading at $3.11 per share, or 0.8x forward price-to-sales. Read our free research report to see why you should think twice about including BYND in your portfolio.
FuelCell Energy (FCEL)
Trailing 12-Month Free Cash Flow Margin: -161%
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Why Do We Think Twice About FCEL?
- New orders were hard to come by as its average backlog growth of 1% over the past two years underwhelmed
- Free cash flow margin dropped by 73.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
FuelCell Energy’s stock price of $4.96 implies a valuation ratio of 0.6x forward price-to-sales. To fully understand why you should be careful with FCEL, check out our full research report (it’s free).
One Stock to Watch:
Rumble (RUM)
Trailing 12-Month Free Cash Flow Margin: -87.8%
Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ: RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.
Why Does RUM Stand Out?
- Market share has increased this cycle as its 38.4% annual revenue growth over the last two years was exceptional
At $8.84 per share, Rumble trades at 20.5x trailing 12-month price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
