3 Cash-Burning Stocks 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.

Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. That said, here are three cash-burning companies to avoid and some better opportunities instead.

Intel (INTC)

Trailing 12-Month Free Cash Flow Margin: -3%

Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ:INTC) is a leading manufacturer of computer processors and graphics chips.

Why Is INTC Risky?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last five years
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 40.1% annually, worse than its revenue
3. Free cash flow margin dropped by 18.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Intel is trading at $49.02 per share, or 108.2x forward P/E. Check out our free in-depth research report to learn more about why INTC doesn’t pass our bar.

Optimum Communications (OPTU)

Trailing 12-Month Free Cash Flow Margin: -3.1%

Based in Long Island City, Optimum Communications (NYSE:OPTU) is a telecommunications company offering cable, internet, telephone, and television services across the United States.

Why Should You Sell OPTU?

1. Demand for its offerings was relatively low as its number of broadband subscribers has underwhelmed
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 8× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Optimum Communications’s stock price of $1.60 implies a valuation ratio of 7.7x forward EV-to-EBITDA. If you’re considering OPTU for your portfolio, see our FREE research report to learn more.

Universal Logistics (ULH)

Trailing 12-Month Free Cash Flow Margin: -2.2%

Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Why Do We Pass on ULH?

1. Sales tumbled by 2.7% annually over the last two years, showing market trends are working against its favor during this cycle
2. Weak free cash flow margin of -0.9% has deteriorated further over the last five years as its investments increased
3. Waning returns on capital imply its previous profit engines are losing steam

At $17.46 per share, Universal Logistics trades at 26.2x forward P/E. Dive into our free research report to see why there are better opportunities than ULH.

Stocks We Like 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 6 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).

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.