While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
Match Group (MTCH)
Trailing 12-Month Free Cash Flow Margin: 29%
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Why Are We Hesitant About MTCH?
- Intense competition is diverting traffic from its platform as its payers fell by 4.5% annually
- Platform has lost its luster lately as engagement trends have been sluggish and its average revenue per user has declined by 12.1% annually
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
At $39.15 per share, Match Group trades at 9.9x forward EV/EBITDA. Check out our free in-depth research report to learn more about why MTCH doesn’t pass our bar.
10x Genomics (TXG)
Trailing 12-Month Free Cash Flow Margin: 19.1%
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ: TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
Why Do We Pass on TXG?
- Sales trends were unexciting over the last two years as its 1.1% annual growth was below the typical healthcare company
- Modest revenue base of $638.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Negative returns on capital show that some of its growth strategies have backfired
10x Genomics is trading at $43.89 per share, or 9.2x forward price-to-sales. If you’re considering TXG for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Enpro (NPO)
Trailing 12-Month Free Cash Flow Margin: 14.7%
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.
Why Is NPO on Our Radar?
- Operating margin improvement of 5 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 16.4% annually
- Strong free cash flow margin of 13% enables it to reinvest or return capital consistently
Enpro’s stock price of $322.75 implies a valuation ratio of 33.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
