A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
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 are three companies with net cash positions that don’t make the cut and some better choices instead.
Twilio (TWLO)
Net Cash Position: $1.39 billion (7.8% of Market Cap)
Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE: TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.
Why Does TWLO Give Us Pause?
- Average billings growth of 13.4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Gross margin of 49% reflects its high servicing costs
- Operating margin expanded by 4.3 percentage points over the last year as it scaled and became more efficient
Twilio’s stock price of $117.90 implies a valuation ratio of 3.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TWLO.
News Corp (NWSA)
Net Cash Position: $25 million (0.2% of Market Cap)
Established in 2013 after a restructuring, News Corp (NASDAQ: NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.
Why Should You Dump NWSA?
- Sales were flat over the last five years, indicating it’s failed to expand its business
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- ROIC hasn’t moved, making investors question whether its recent investments can increase profitability
At $24.48 per share, News Corp trades at 20.5x forward P/E. If you’re considering NWSA for your portfolio, see our FREE research report to learn more.
FB Financial (FBK)
Net Cash Position: $810.6 million (28.5% of Market Cap)
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE: FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
Why Are We Wary of FBK?
- Sales trends were unexciting over the last five years as its 1.9% annual growth was below the typical banking company
- Estimated net interest income growth of 4.9% for the next 12 months implies demand will slow from its five-year trend
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 2.4% annually
FB Financial is trading at $54.93 per share, or 1.4x forward P/B. Check out our free in-depth research report to learn more about why FBK doesn’t pass our bar.
Stocks We Like More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
