Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Akamai Technologies (AKAM)
Trailing 12-Month Free Cash Flow Margin: 17.4%
With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ:AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online.
Why Do We Avoid AKAM?
- Annual revenue growth of 5.1% over the last two years was well below our standards for the software sector
- Gross margin of 59.1% is way below its competitors, leaving less money to invest in areas like marketing and R&D
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
At $87.74 per share, Akamai Technologies trades at 2.9x forward price-to-sales. Read our free research report to see why you should think twice about including AKAM in your portfolio.
Amplitude (AMPL)
Trailing 12-Month Free Cash Flow Margin: 4.2%
Born from the realization that companies were flying blind when it came to understanding user behavior in their digital products, Amplitude (NASDAQ:AMPL) provides a digital analytics platform that helps businesses understand how people use their digital products to improve user experiences and drive revenue growth.
Why Is AMPL Risky?
- ARR growth averaged a weak 13.8% over the last year, suggesting that competition is pulling some attention away from its software
- Struggled to drive increased usage of its software, demonstrated by its subpar 101% net revenue retention rate
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 2.2 percentage points
Amplitude is trading at $9.87 per share, or 3.5x forward price-to-sales. If you’re considering AMPL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Upwork (UPWK)
Trailing 12-Month Free Cash Flow Margin: 25.7%
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ:UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Is UPWK a Top Pick?
- Customers are spending more money on its platform as its average revenue per customer has increased by 9.4% annually over the last two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 123% over the last three years outstripped its revenue performance
- Free cash flow margin expanded by 29.3 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Upwork’s stock price of $17.16 implies a valuation ratio of 10.3x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.