Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are three cash-burning companies to avoid and some better opportunities instead.
Enviri (NVRI)
Trailing 12-Month Free Cash Flow Margin: -2.1%
Cooling America’s first indoor ice rink in the 19th century, Enviri (NYSE: NVRI) offers steel and waste handling services.
Why Should You Sell NVRI?
- Sales trends were unexciting over the last two years as its 7.1% annual growth was below the typical industrials company
- Cash-burning history makes us doubt the long-term viability of its business model
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Enviri’s stock price of $8.15 implies a valuation ratio of 2.6x forward EV-to-EBITDA. To fully understand why you should be careful with NVRI, check out our full research report (it’s free).
Myriad Genetics (MYGN)
Trailing 12-Month Free Cash Flow Margin: -2.9%
Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ: MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.
Why Do We Think MYGN Will Underperform?
- Annual revenue growth of 1.8% over the last five years was below our standards for the healthcare sector
- Earnings per share fell by 29.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Negative returns on capital show that some of its growth strategies have backfired, and its shrinking returns suggest its past profit sources are losing steam
Myriad Genetics is trading at $4.09 per share, or 32.5x forward P/E. Dive into our free research report to see why there are better opportunities than MYGN.
EchoStar (SATS)
Trailing 12-Month Free Cash Flow Margin: -1.8%
Following its 2023 acquisition of DISH Network, EchoStar (NASDAQ: SATS) provides satellite communications, pay-TV services, wireless networks, and broadband solutions across consumer and enterprise markets.
Why Are We Cautious About SATS?
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 11.5% annually while its revenue grew
- 6.8 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
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $20.50 per share, EchoStar trades at 3.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SATS doesn’t pass our bar.
Stocks We Like More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
