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. That said, here is one company with a net cash position that balances growth with stability and two that may struggle.
Two Stocks to Sell:
Zoom (ZM)
Net Cash Position: $7.79 billion (30% of Market Cap)
Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ: ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.
Why Are We Out on ZM?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 4% underwhelmed
- Net revenue retention rate of 98% shows it has a tough time retaining customers
- Projected sales growth of 4.2% for the next 12 months suggests sluggish demand
At $88.32 per share, Zoom trades at 5.2x forward price-to-sales. Read our free research report to see why you should think twice about including ZM in your portfolio.
Figs (FIGS)
Net Cash Position: $240.8 million (9% of Market Cap)
Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE: FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.
Why Do We Think FIGS Will Underperform?
- Lackluster 19.1% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Earnings per share have dipped by 3.6% annually over the past four years, which is concerning because stock prices follow EPS over the long term
- Free cash flow margin is expected to remain in place over the coming year
Figs’s stock price of $16.15 implies a valuation ratio of 63.8x forward P/E. Dive into our free research report to see why there are better opportunities than FIGS.
One Stock to Buy:
SoFi (SOFI)
Net Cash Position: $2.98 billion (12% of Market Cap)
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
Why Are We Backing SOFI?
- Market share has increased this cycle as its 31.6% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 148% annual growth in its earnings per share outpaced its revenue
SoFi is trading at $19.42 per share, or 32.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 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%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. 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 (+1,326% 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.
