2 Unprofitable Stocks with Promising Prospects and 1 We Turn Down

Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are two unprofitable companies that could turn today’s losses into long-term gains and one best left off your radar.

One Stock to Sell:

Fortrea (FTRE)

Trailing 12-Month GAAP Operating Margin: -33.1%

Spun off from Labcorp in 2023 to focus exclusively on clinical research services, Fortrea (NASDAQ:FTRE) is a contract research organization that helps pharmaceutical, biotech, and medical device companies develop and bring their products to market through clinical trials and support services.

Why Do We Avoid FTRE?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 2.6% annually over the last four years
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Fortrea’s stock price of $16.51 implies a valuation ratio of 23.1x forward P/E. To fully understand why you should be careful with FTRE, check out our full research report (it’s free).

Two Stocks to Watch:

Braze (BRZE)

Trailing 12-Month GAAP Operating Margin: -19.9%

With its technology powering interactions with 6.2 billion monthly active users across the digital landscape, Braze (NASDAQ:BRZE) provides a platform that helps brands build and maintain direct relationships with their customers through personalized, cross-channel messaging and engagement.

Why Could BRZE Be a Winner?

1. Impressive 25.6% annual revenue growth over the last two years indicates it’s winning market share
2. Average billings growth of 22.4% over the last year enhances its liquidity and shows there is steady demand for its products
3. Projected revenue growth of 19.1% for the next 12 months suggests its momentum from the last two years will persist

Braze is trading at $23.12 per share, or 3.3x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Samsara (IOT)

Trailing 12-Month GAAP Operating Margin: -5.3%

From sensors on vehicles to AI-powered cameras that help prevent accidents, Samsara (NYSE:IOT) is a cloud-based Internet of Things platform that helps businesses improve the safety, efficiency, and sustainability of their physical operations.

Why Will IOT Beat the Market?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 30.5% growth over the last year
2. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
3. Operating margin expanded by 19.7 percentage points over the last year as it scaled and became more efficient

At $34.88 per share, Samsara trades at 11x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Check out the high-quality names we’ve flagged in 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.