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.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
Payoneer (PAYO)
Net Cash Position: $337.3 million (14.9% of Market Cap)
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Does PAYO Worry Us?
- Incremental sales over the last two years were less profitable as its 4.8% annual earnings per share growth lagged its revenue gains
- Underwhelming 7.3% return on equity reflects management’s difficulties in finding profitable growth opportunities
Payoneer’s stock price of $7.05 implies a valuation ratio of 24.8x forward P/E. Dive into our free research report to see why there are better opportunities than PAYO.
Two Stocks to Buy:
Datadog (DDOG)
Net Cash Position: $3.47 billion (4.2% of Market Cap)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Do We Love DDOG?
- Ability to secure long-term commitments with customers is evident in its 29.5% ARR growth over the last year
- Notable projected revenue growth of 24% for the next 12 months hints at market share gains
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
At $220.58 per share, Datadog trades at 17.7x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Blue Bird (BLBD)
Net Cash Position: $187.9 million (8.3% of Market Cap)
With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.
Why Is BLBD a Good Business?
- Annual revenue growth of 14.3% over the past five years was outstanding, reflecting market share gains this cycle
- Free cash flow margin jumped by 21 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Improving returns on capital reflect management’s ability to monetize investments
Blue Bird is trading at $73.82 per share, or 14.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
