A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are three companies with net cash positions to steer clear of and a few alternatives to consider.
Flywire (FLYW)
Net Cash Position: $195.3 million (15.8% of Market Cap)
Originally created to process international tuition payments for universities, Flywire (NASDAQ: FLYW) is a cross border payments processor and software platform focusing on complex, high-value transactions like education, healthcare and B2B payments.
Why Are We Wary of FLYW?
- Gross margin of 63.6% reflects its relatively high servicing costs
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Operating losses show it sacrificed profitability while scaling the business
Flywire is trading at $10 per share, or 2.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FLYW.
Zevia (ZVIA)
Net Cash Position: $26.47 million (16% of Market Cap)
With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE: ZVIA) is a better-for-you beverage company.
Why Does ZVIA Worry Us?
- Annual revenue growth of 2% over the last three years was below our standards for the consumer staples sector
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 27.1% annually
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Zevia’s stock price of $2.52 implies a valuation ratio of 1.2x forward price-to-sales. If you’re considering ZVIA for your portfolio, see our FREE research report to learn more.
Landstar (LSTR)
Net Cash Position: $379.5 million (7.8% of Market Cap)
Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Do We Think LSTR Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 16.5% annually over the last two years
- Flat earnings per share over the last five years underperformed the sector average
- Waning returns on capital imply its previous profit engines are losing steam
At $140.01 per share, Landstar trades at 23.9x forward P/E. Check out our free in-depth research report to learn more about why LSTR 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
