While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth. A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.
Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. Keeping that in mind, here is one high-risk, high-reward company that could turn today’s losses into tomorrow’s gains and two to leave off your radar.
Two Stocks to Sell:
1-800-FLOWERS (FLWS)
Trailing 12-Month Free Cash Flow Margin: -1%
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
Why Do We Avoid FLWS?
- Sales tumbled by 5.5% annually over the last five years, showing consumer trends are working against it
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
At $3.90 per share, 1-800-FLOWERS trades at 0.2x forward price-to-sales. Read our free research report to see why you should think twice about including FLWS in your portfolio.
PAR Technology (PAR)
Trailing 12-Month Free Cash Flow Margin: -7.7%
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE: PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Do We Think Twice About PAR?
- Cash-burning history makes us doubt the long-term viability of its business model
- Negative returns on capital show that some of its growth strategies have backfired
PAR Technology’s stock price of $16.87 implies a valuation ratio of 23.1x forward P/E. To fully understand why you should be careful with PAR, check out our full research report (it’s free).
One Stock to Buy:
SoFi (SOFI)
Trailing 12-Month Free Cash Flow Margin: -263%
Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ: SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money.
Why Is SOFI a Good Business?
- Market share has increased this cycle as its 35.9% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 183% annually, topping its revenue gains
SoFi is trading at $16.19 per share, or 22.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
