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. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one best left off your watchlist.
One Stock to Sell:
Fiverr (FVRR)
Net Cash Position: $417.2 million (98.8% of Market Cap)
Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.
Why Are We Hesitant About FVRR?
- Value proposition isn’t resonating strongly as its active buyers averaged 12.3% drops over the last two years
- Forecasted revenue decline of 7.2% for the upcoming 12 months implies demand will fall off a cliff
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $11.58 per share, Fiverr trades at 1.3x forward price-to-gross profit. If you’re considering FVRR for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Zscaler (ZS)
Net Cash Position: $1.65 billion (6.7% of Market Cap)
Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ: ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.
Why Is ZS a Top Pick?
- Average billings growth of 24.3% over the last year enhances its liquidity and shows there is steady demand for its products
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Robust free cash flow margin of 29.1% gives it many options for capital deployment
Zscaler is trading at $150.65 per share, or 6.1x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Pathward Financial (CASH)
Net Cash Position: $98.09 million (5.3% of Market Cap)
Formerly known as Meta Financial until its 2022 rebranding, Pathward Financial (NASDAQ: CASH) provides banking-as-a-service solutions and commercial finance products, enabling partners to offer financial services like prepaid cards, payment processing, and lending options.
Why Will CASH Outperform?
- Solid 13.2% annual net interest income growth over the last five years indicates its offerings are gaining share
- Differentiated product suite results in a Strong performance of its loan book results in a High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 7.2%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 18.3% exceeded its revenue gains over the last five years
Pathward Financial’s stock price of $90.10 implies a valuation ratio of 2.1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
