1 Unprofitable Stock for Long-Term Investors and 2 We Ignore

Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here is one unprofitable company with the potential to become an industry leader and two that may never reach the Promised Land.

Two Stocks to Sell:

Procore Technologies (PCOR)

Trailing 12-Month GAAP Operating Margin: -11.6%

With a mission to build software for the people that build the world, Procore Technologies (NYSE:PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.

Why Are We Cautious About PCOR?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 13.6% underwhelmed
2. Estimated sales growth of 12% for the next 12 months implies demand will slow from its two-year trend
3. Operating margin dropped by 1.9 percentage points over the last year as the company focused on expansion rather than profitability

At $72.74 per share, Procore Technologies trades at 7.6x forward price-to-sales. If you’re considering PCOR for your portfolio, see our FREE research report to learn more.

1-800-FLOWERS (FLWS)

Trailing 12-Month GAAP Operating Margin: -3.6%

Founded in 1976, 1-800-FLOWERS (NASDAQ:FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.

Why Do We Pass on FLWS?

1. Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

1-800-FLOWERS is trading at $3.98 per share, or 0.2x forward price-to-sales. Check out our free in-depth research report to learn more about why FLWS doesn’t pass our bar.

One Stock to Buy:

WEBTOON (WBTN)

Trailing 12-Month GAAP Operating Margin: -5.6%

Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ:WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.

Why Do We Love WBTN?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 7.2% annual sales growth over the last two years
2. Adjusted operating margin increased by 11 percentage points over the last four years as it refined its cost structure
3. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 75.9% outpaced its revenue gains

WEBTOON’s stock price of $13.01 implies a valuation ratio of 57.1x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our full 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 5 Growth Stocks for this month. 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.