Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.
Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. Keeping that in mind, here is one unprofitable company with the potential to become an industry leader and two best left off your radar.
Two Stocks to Sell:
Clover Health (CLOV)
Trailing 12-Month GAAP Operating Margin: -1.6%
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Does CLOV Give Us Pause?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 28.7% annually over the last two years
- Weak customer trends over the past two years suggest it may need to improve its products, pricing, or go-to-market strategy
- Negative free cash flow raises questions about the return timeline for its investments
Clover Health’s stock price of $2.91 implies a valuation ratio of 39.8x forward EV-to-EBITDA. If you’re considering CLOV for your portfolio, see our FREE research report to learn more.
PAR Technology (PAR)
Trailing 12-Month GAAP Operating Margin: -17.7%
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE: PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Is PAR Not Exciting?
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 6.3 percentage points
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
At $62.73 per share, PAR Technology trades at 237.8x forward P/E. Read our free research report to see why you should think twice about including PAR in your portfolio.
One Stock to Watch:
Marvell Technology (MRVL)
Trailing 12-Month GAAP Operating Margin: -4.6%
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Could MRVL Be a Winner?
- Annual revenue growth of 18.9% over the past five years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 31.8%
- Additional sales over the last five years increased its profitability as the 23.5% annual growth in its earnings per share outpaced its revenue
Marvell Technology is trading at $69.70 per share, or 23.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. 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 Comfort Systems (+782% 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
