2 Cash-Producing Stocks for Long-Term Investors and 1 We Find Risky

A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one best left off your watchlist.

One Stock to Sell:

Amplitude (AMPL)

Trailing 12-Month Free Cash Flow Margin: 6.8%

Born from the realization that companies were flying blind when it came to understanding user behavior in their digital products, Amplitude (NASDAQ:AMPL) provides a digital analytics platform that helps businesses understand how people use their digital products to improve user experiences and drive revenue growth.

Why Do We Think Twice About AMPL?

1. Customers generally do not adopt complementary products as its 102% net revenue retention rate lags behind the industry standard
2. Historical operating margin losses point to an inefficient cost structure
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.8% for the last year

At $7.80 per share, Amplitude trades at 2.6x forward price-to-sales. Read our free research report to see why you should think twice about including AMPL in your portfolio.

Two Stocks to Buy:

Micron (MU)

Trailing 12-Month Free Cash Flow Margin: 11%

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Why Are We Backing MU?

1. Annual revenue growth of 61.7% over the past two years was outstanding, reflecting market share gains this cycle
2. Exciting sales outlook for the upcoming 12 months calls for 114% growth, an acceleration from its two-year trend
3. Earnings per share grew by 29.2% annually over the last five years and trumped its peers

Micron’s stock price of $406.03 implies a valuation ratio of 9.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

DoorDash (DASH)

Trailing 12-Month Free Cash Flow Margin: 13.3%

Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE:DASH) operates an on-demand food delivery platform.

Why Is DASH a Good Business?

1. Orders are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Additional sales over the last three years increased its profitability as the 931% annual growth in its earnings per share outpaced its revenue
3. Free cash flow margin increased by 13 percentage points over the last few years, giving the company more capital to invest or return to shareholders

DoorDash is trading at $178.13 per share, or 20.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.