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.

Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. 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:

1-800-FLOWERS (FLWS)

Trailing 12-Month GAAP Operating Margin: -3.4%

Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.

Why Do We Think FLWS Will Underperform?

1. Annual revenue declines of 8.6% over the last two years indicate problems with its market positioning
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

1-800-FLOWERS’s stock price of $4.86 implies a valuation ratio of 0.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FLWS.

SolarEdge (SEDG)

Trailing 12-Month GAAP Operating Margin: -169%

Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.

Why Should You Dump SEDG?

1. Demand for its offerings was relatively low as its number of megawatts shipped has underwhelmed
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

SolarEdge is trading at $39.45 per share, or 1.7x forward price-to-sales. Read our free research report to see why you should think twice about including SEDG in your portfolio.

One Stock to Buy:

Cloudflare (NET)

Trailing 12-Month GAAP Operating Margin: -9.9%

With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE: NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.

Why Are We Backing NET?

1. Winning new contracts that can potentially increase in value as its billings growth has averaged 30.3% over the last year
2. Expected revenue growth of 26.3% for the next year suggests its market share will rise
3. User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs

At $216.41 per share, Cloudflare trades at 31.6x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 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 Tecnoglass (+1,754% 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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