Companies that burn cash at a rapid pace can run into serious trouble if they fail to secure funding. Without a clear path to profitability, these businesses risk dilution, mounting debt, or even bankruptcy.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here is one high-risk, high-reward company investing aggressively to carve out a leadership position and two to leave off your radar.
Two Stocks to Sell:
AAON (AAON)
Trailing 12-Month Free Cash Flow Margin: -13.2%
Backed by two million square feet of lab testing space, AAON (NASDAQ: AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
Why Does AAON Worry Us?
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 3.7 percentage points
- Earnings per share fell by 21.5% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 14.3 percentage points
AAON’s stock price of $82.77 implies a valuation ratio of 39.2x forward P/E. Read our free research report to see why you should think twice about including AAON in your portfolio.
ePlus (PLUS)
Trailing 12-Month Free Cash Flow Margin: -2.8%
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Are We Cautious About PLUS?
- Muted 4.4% annual revenue growth over the last two years shows its demand lagged behind its business services peers
- Performance over the past two years shows its incremental sales were less profitable as its earnings per share were flat
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
ePlus is trading at $75.34 per share, or 14.1x forward P/E. Dive into our free research report to see why there are better opportunities than PLUS.
One Stock to Buy:
FTAI Aviation (FTAI)
Trailing 12-Month Free Cash Flow Margin: -41.4%
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ: FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Is FTAI a Top Pick?
- Annual revenue growth of 46.3% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 43.8% annually over the last two years, massively outpacing its peers
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
At $245.50 per share, FTAI Aviation trades at 31.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
