Bark has gotten torched over the last six months - since November 2025, its stock price has dropped 40.7% to $9.37 per share. This might have investors contemplating their next move.
Is there a buying opportunity in Bark, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Bark Will Underperform?
Despite the more favorable entry price, we're swiping left on Bark for now. Here are three reasons you should be careful with BARK and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Bark’s 5.2% annualized revenue growth over the last five years was weak. This was below our standard for the consumer discretionary sector.
2. Cash Burn Ignites Concerns
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
While Bark posted positive free cash flow this quarter, the broader story hasn’t been so clean. Over the last two years, Bark’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 4.5%, meaning it lit $4.48 of cash on fire for every $100 in revenue.
3. Short Cash Runway Exposes Shareholders to Potential Dilution
As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.
Bark burned through $36.5 million of cash over the last year, and its $38.31 million of debt exceeds the $21.68 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.
Unless the Bark’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.
We remain cautious of Bark until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.
Final Judgment
We cheer for all companies serving everyday consumers, but in the case of Bark, we’ll be cheering from the sidelines. After the recent drawdown, the stock trades at 24.7× forward EV-to-EBITDA (or $9.37 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think other companies feature superior fundamentals at the moment. We’d recommend looking at the Amazon and PayPal of Latin America.
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