A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here is one company with a net cash position that can continue growing sustainably and two that may struggle.
Two Stocks to Sell:
Nextdoor (NXDR)
Net Cash Position: $376.7 million (57.9% of Market Cap)
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE: KIND) is a social network that connects neighbors with each other and with local businesses.
Why Is NXDR Not Exciting?
- White space opportunities may be dwindling as its growth in weekly active users averaged a weak 6.5%
- Suboptimal cost structure is highlighted by its history of EBITDA margin losses
- Negative free cash flow raises questions about the return timeline for its investments
At $1.68 per share, Nextdoor trades at 2.9x forward price-to-gross profit. Check out our free in-depth research report to learn more about why NXDR doesn’t pass our bar.
Moderna (MRNA)
Net Cash Position: $3.77 billion (39% of Market Cap)
Rising to global prominence during the COVID-19 pandemic with one of the first effective vaccines, Moderna (NASDAQ: MRNA) develops messenger RNA (mRNA) medicines that direct the body's cells to produce proteins with therapeutic or preventive benefits for various diseases.
Why Do We Think MRNA Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 50.5% annually over the last two years
- 215.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Moderna is trading at $24.76 per share, or 6.1x forward price-to-sales. Read our free research report to see why you should think twice about including MRNA in your portfolio.
One Stock to Buy:
Sea (SE)
Net Cash Position: $5.66 billion (6.8% of Market Cap)
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Is SE a Top Pick?
- Paying Users have increased by an average of 21.9% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 42.6% over the last three years outstripped its revenue performance
- Free cash flow margin grew by 36 percentage points over the last few years, giving the company more chips to play with
Sea’s stock price of $141.26 implies a valuation ratio of 22.8x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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