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. That said, here is one unprofitable company with the potential to become an industry leader and two best left off your radar.
Two Stocks to Sell:
Under Armour (UAA)
Trailing 12-Month GAAP Operating Margin: -3.3%
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE: UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Why Is UAA Risky?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Under Armour’s stock price of $5.97 implies a valuation ratio of 52x forward P/E. Read our free research report to see why you should think twice about including UAA in your portfolio.
QuidelOrtho (QDEL)
Trailing 12-Month GAAP Operating Margin: -37%
Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ: QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.
Why Should You Dump QDEL?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Free cash flow margin dropped by 23 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Waning returns on capital imply its previous profit engines are losing steam
QuidelOrtho is trading at $12.32 per share, or 6.6x forward P/E. If you’re considering QDEL for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Core Natural Resources (CNR)
Trailing 12-Month GAAP Operating Margin: -2.3%
Tracing its origins to 1864 and operating some mines southwest of Pittsburgh, Core Natural Resources (NYSE: CNR) mines and exports metallurgical coal used in steelmaking and thermal coal for power generation.
Why Could CNR Be a Winner?
- Annual revenue growth of 14.2% over the past nine years was outstanding, reflecting market share gains this cycle
- $4.23 billion in revenue gives it scale, which leads to bargaining power with suppliers and retailers
- CNR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $81.75 per share, Core Natural Resources trades at 4.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
