2 Cash-Heavy Stocks with Promising Prospects and 1 Facing Headwinds

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 balance growth with stability and one best left off your watchlist.

One Stock to Sell:

Teradyne (TER)

Net Cash Position: $293.4 million (1.6% of Market Cap)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Why Does TER Fall Short?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 14.4 percentage points
3. Earnings per share fell by 4.4% annually over the last five years while its revenue was flat, showing each sale was less profitable

Teradyne is trading at $118.90 per share, or 29.9x forward P/E. Read our free research report to see why you should think twice about including TER in your portfolio.

Two Stocks to Watch:

SentinelOne (S)

Net Cash Position: $793.1 million (12.6% of Market Cap)

Built on the principle of "fighting machine with machine," SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.

Why Do We Like S?

1. ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable three-year growth trajectory
3. Free cash flow margin is expected to increase by 6.8 percentage points next year, suggesting the company will have more capital to invest or return to shareholders

SentinelOne’s stock price of $18.81 implies a valuation ratio of 5.7x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

QuinStreet (QNST)

Net Cash Position: $93.7 million (10.4% of Market Cap)

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ:QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

Why Is QNST a Good Business?

1. Annual revenue growth of 37.2% over the last two years was superb and indicates its market share increased during this cycle
2. Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 160% annually

At $15.82 per share, QuinStreet trades at 14.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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