Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
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 that could turn today’s losses into long-term gains and two best left off your radar.
Two Stocks to Sell:
Bally's (BALY)
Trailing 12-Month GAAP Operating Margin: -6.5%
Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE: BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.
Why Do We Think BALY Will Underperform?
- Muted 6.9% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $13.86 per share, Bally's trades at 11.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why BALY doesn’t pass our bar.
ChargePoint (CHPT)
Trailing 12-Month GAAP Operating Margin: -49%
The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE: CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.
Why Are We Hesitant About CHPT?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.3% annually over the last two years
- Cash-burning history makes us doubt the long-term viability of its business model
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
ChargePoint is trading at $8.21 per share, or 0.5x forward price-to-sales. To fully understand why you should be careful with CHPT, check out our full research report (it’s free).
One Stock to Buy:
JFrog (FROG)
Trailing 12-Month GAAP Operating Margin: -14.5%
Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ: FROG) provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.
Why Is FROG a Good Business?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- FROG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
JFrog’s stock price of $84.13 implies a valuation ratio of 15.1x forward price-to-sales. Is now a good time to buy? Find out in our full 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 is 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
