3 Cash-Producing Stocks We Keep Off Our Radar

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.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are three cash-producing companies that don’t make the cut and some better opportunities instead.

Domo (DOMO)

Trailing 12-Month Free Cash Flow Margin: 3.4%

Named for the Japanese word meaning "thank you very much," Domo (NASDAQ:DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.

Why Is DOMO Risky?

1. Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.3%
3. Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low

Domo is trading at $4.36 per share, or 0.5x forward price-to-sales. Read our free research report to see why you should think twice about including DOMO in your portfolio.

Olaplex (OLPX)

Trailing 12-Month Free Cash Flow Margin: 13.8%

Rising to fame on TikTok because of its “bond building" hair products, Olaplex (NASDAQ:OLPX) offers products and treatments that repair the damage caused by traditional heat and chemical-based styling goods.

Why Is OLPX Not Exciting?

1. Annual revenue declines of 15.6% over the last three years indicate problems with its market positioning
2. Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
3. Free cash flow margin dropped by 19.8 percentage points over the last year, implying the company became more capital intensive as competition picked up

At $1.44 per share, Olaplex trades at 19.6x forward P/E. Dive into our free research report to see why there are better opportunities than OLPX.

Xponential Fitness (XPOF)

Trailing 12-Month Free Cash Flow Margin: 7.9%

Owner of CycleBar, Rumble, and Club Pilates, Xponential Fitness (NYSE:XPOF) is a boutique fitness brand offering diverse and specialized exercise experiences.

Why Do We Pass on XPOF?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Persistent operating margin losses suggest the business manages its expenses poorly
3. Free cash flow margin is projected to show no improvement next year

Xponential Fitness’s stock price of $5.91 implies a valuation ratio of 7.7x forward P/E. Check out our free in-depth research report to learn more about why XPOF doesn’t pass our bar.

Stocks We Like More

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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.