2 Unprofitable Stocks on Our Buy List and 1 We Brush Off

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.

Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. Keeping that in mind, here are two unprofitable companies with the potential to become industry leaders and one best left off your radar.

One Stock to Sell:

Myriad Genetics (MYGN)

Trailing 12-Month GAAP Operating Margin: -47%

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Are We Out on MYGN?

1. 4.6% annual revenue growth over the last two years was slower than its healthcare peers
2. Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Myriad Genetics is trading at $5.13 per share, or 77.6x forward P/E. Check out our free in-depth research report to learn more about why MYGN doesn’t pass our bar.

Two Stocks to Buy:

Datadog (DDOG)

Trailing 12-Month GAAP Operating Margin: -1.3%

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.

Why Should You Buy DDOG?

1. ARR growth averaged 27.6% over the last year, showing customers are willing to take multi-year bets on its software
2. Superior software functionality and low servicing costs are reflected in its premier gross margin of 80%
3. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently

Datadog’s stock price of $122.50 implies a valuation ratio of 10.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

Fluence Energy (FLNC)

Trailing 12-Month GAAP Operating Margin: -2.2%

Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ:FLNC) helps store renewable energy sources with battery systems.

Why Do We Love FLNC?

1. Sales pipeline is in good shape as its backlog averaged 18.1% growth over the past two years
2. Earnings growth has massively outpaced its peers over the last four years as its EPS has compounded at 36.4% annually
3. Cash burn has become less severe over the last five years, showing the company is making some progress toward financial sustainability

At $15.67 per share, Fluence Energy trades at 213.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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 Kadant (+351% five-year return). Find your next big winner with StockStory today.