3 Cash-Heavy Stocks We Find Risky

A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.

Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here are three companies with net cash positions to steer clear of and a few alternatives to consider.

Asana (ASAN)

Net Cash Position: $222.9 million (7.8% of Market Cap)

Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE:ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.

Why Do We Think ASAN Will Underperform?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 9.6% average billings growth over the last year was weak
2. Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 95.7% net revenue retention rate
3. Prolonged sales cycles signal certain parts of its software must be customized for its large enterprise clients, impeding customer growth

Asana’s stock price of $12.13 implies a valuation ratio of 3.5x forward price-to-sales. Read our free research report to see why you should think twice about including ASAN in your portfolio.

Pegasystems (PEGA)

Net Cash Position: $289 million (3.1% of Market Cap)

With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ:PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.

Why Does PEGA Give Us Pause?

1. Sales trends were unexciting over the last five years as its 11.7% annual growth was below the typical software company
2. Estimated sales growth of 4.2% for the next 12 months implies demand will slow from its two-year trend
3. Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions

At $54.65 per share, Pegasystems trades at 5.5x forward price-to-sales. If you’re considering PEGA for your portfolio, see our FREE research report to learn more.

T. Rowe Price (TROW)

Net Cash Position: $3.6 billion (16.9% of Market Cap)

Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ:TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.

Why Do We Think Twice About TROW?

1. 4% annual revenue growth over the last five years was slower than its financials peers
2. Performance over the past five years shows its incremental sales were less profitable, as its 1.5% annual earnings per share growth trailed its revenue gains

T. Rowe Price is trading at $97.50 per share, or 9.4x forward P/E. Dive into our free research report to see why there are better opportunities than TROW.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).

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