Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.
Two Stocks to Sell:
Marqeta (MQ)
Net Cash Position: $707.3 million (44.1% of Market Cap)
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Does MQ Give Us Pause?
- Muted 6.3% annual revenue growth over the last two years shows its demand lagged behind its software peers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 5.3 percentage points
At $3.88 per share, Marqeta trades at 2.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MQ.
ePlus (PLUS)
Net Cash Position: $285.7 million (13.2% of Market Cap)
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 Does PLUS Worry Us?
- Annual revenue growth of 4.8% over the last two years was below our standards for the business services sector
- Incremental sales over the last two years were less profitable as its 3.2% annual earnings per share growth lagged its revenue gains
- Free cash flow margin shrank by 2.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
ePlus is trading at $80.40 per share, or 15.5x forward P/E. Read our free research report to see why you should think twice about including PLUS in your portfolio.
One Stock to Buy:
Napco (NSSC)
Net Cash Position: $119.7 million (9.2% of Market Cap)
Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.
Why Will NSSC Beat the Market?
- Impressive 14.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
- NSSC is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
- Returns on capital are climbing as management makes more lucrative bets
Napco’s stock price of $37.50 implies a valuation ratio of 23.9x 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
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
