1 Cash-Producing Stock with Solid Fundamentals and 2 We Brush Off

Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.

Two Stocks to Sell:

Qualys (QLYS)

Trailing 12-Month Free Cash Flow Margin: 41.6%

Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.

Why Is QLYS Not Exciting?

1. Underwhelming ARR growth of 10.1% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
2. Estimated sales growth of 8.1% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage

Qualys is trading at $128.81 per share, or 6.7x forward price-to-sales. To fully understand why you should be careful with QLYS, check out our full research report (it’s free).

Mettler-Toledo (MTD)

Trailing 12-Month Free Cash Flow Margin: 22.6%

With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE:MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.

Why Are We Hesitant About MTD?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
3. Expenses have increased as a percentage of revenue over the last two years as its adjusted operating margin fell by 1.4 percentage points

Mettler-Toledo’s stock price of $1,406 implies a valuation ratio of 32.3x forward P/E. Check out our free in-depth research report to learn more about why MTD doesn’t pass our bar.

One Stock to Watch:

HubSpot (HUBS)

Trailing 12-Month Free Cash Flow Margin: 17.8%

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE:HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

Why Does HUBS Stand Out?

1. Winning new contracts that can potentially increase in value as its billings growth has averaged 19.8% over the last year
2. Software is difficult to replicate at scale and leads to a stellar gross margin of 84.1%
3. Free cash flow margin is forecasted to grow by 1.9 percentage points in the coming year, potentially giving the company more chips to play with

At $322.36 per share, HubSpot trades at 4.8x forward price-to-sales. Is now a good time to buy? 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.