3 Unprofitable Stocks in the Doghouse

Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here are three unprofitable companiesto avoid and some better opportunities instead.

Zillow (ZG)

Trailing 12-Month GAAP Operating Margin: -8.8%

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.

Why Are We Hesitant About ZG?

1. Products and services have few die-hard fans as sales have declined by 4% annually over the last five years
2. Persistent operating losses suggest the business manages its expenses poorly
3. Negative returns on capital show that some of its growth strategies have backfired

At $65.75 per share, Zillow trades at 34.2x forward P/E. Read our free research report to see why you should think twice about including ZG in your portfolio.

Sweetgreen (SG)

Trailing 12-Month GAAP Operating Margin: -14.1%

Founded in 2007 by three Georgetown University alum, Sweetgreen (NYSE:SG) is a casual quick service chain known for its healthy salads and bowls.

Why Does SG Fall Short?

1. Historical operating losses point to an inefficient cost structure
2. Negative free cash flow raises questions about the return timeline for its investments
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Sweetgreen is trading at $19.41 per share, or 65.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than SG.

MasterCraft (MCFT)

Trailing 12-Month GAAP Operating Margin: -2.3%

Started by a waterskiing instructor, MasterCraft (NASDAQ:MCFT) specializes in designing, manufacturing, and selling sport boats.

Why Does MCFT Give Us Pause?

1. Performance surrounding its boats sold has lagged its peers
2. Estimated sales growth of 6.2% for the next 12 months is soft and implies weaker demand
3. Sales were less profitable over the last five years as its earnings per share fell by 26.6% annually, worse than its revenue declines

MasterCraft’s stock price of $16.81 implies a valuation ratio of 14.4x forward P/E. To fully understand why you should be careful with MCFT, check out our full research report (it’s free).

Stocks That Overcame Trump’s 2018 Tariffs

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.