1 Cash-Burning Stock with Exciting Potential and 2 We Find Risky

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.

Just because a company is spending heavily doesn’t mean it’s on the right track, and StockStory is here to separate the winners from the losers. Keeping that in mind, here is one high-risk, high-reward company investing aggressively to carve out a leadership position and two to leave off your radar.

Two Stocks to Sell:

nLIGHT (LASR)

Trailing 12-Month Free Cash Flow Margin: -8.5%

Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ:LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.

Why Do We Pass on LASR?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 1.6% annually over the last two years
2. 6.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

nLIGHT’s stock price of $27.21 implies a valuation ratio of 2,807x forward P/E. Dive into our free research report to see why there are better opportunities than LASR.

Burlington (BURL)

Trailing 12-Month Free Cash Flow Margin: -2.8%

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Why Does BURL Worry Us?

1. Sizable revenue base leads to growth challenges as its 8% annual revenue increases over the last six years fell short of other consumer retail companies
2. Free cash flow margin dropped by 6.5 percentage points over the last year, implying the company became more capital intensive as competition picked up
3. Underwhelming 9% return on capital reflects management’s difficulties in finding profitable growth opportunities

Burlington is trading at $260.78 per share, or 25.3x forward P/E. To fully understand why you should be careful with BURL, check out our full research report (it’s free for active Edge members).

One Stock to Buy:

FTAI Aviation (FTAI)

Trailing 12-Month Free Cash Flow Margin: -64%

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.

Why Is FTAI a Good Business?

1. Annual revenue growth of 41.4% over the past two years was outstanding, reflecting market share gains this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 67% annually, topping its revenue gains
3. Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business

At $162 per share, FTAI Aviation trades at 27x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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