1 Unprofitable Stock Worth Investigating and 2 to Approach with Caution

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. That said, here is one unprofitable company that could turn today’s losses into long-term gains and two best left off your radar.

Two Stocks to Sell:

FuelCell Energy (FCEL)

Trailing 12-Month GAAP Operating Margin: -130%

Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.

Why Are We Cautious About FCEL?

1. Backlog growth averaged a weak 1% over the past two years, suggesting it may need to tweak its product roadmap or go-to-market strategy
2. Free cash flow margin shrank by 73.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

FuelCell Energy’s stock price of $4.04 implies a valuation ratio of 0.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FCEL.

Dentsply Sirona (XRAY)

Trailing 12-Month GAAP Operating Margin: -23.2%

With roots dating back to 1877 when it introduced the first dental electric drill, Dentsply Sirona (NASDAQ:XRAY) manufactures and sells professional dental equipment, technologies, and consumable products used by dentists and specialists worldwide.

Why Should You Dump XRAY?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 7.4% annually, worse than its revenue
3. Negative returns on capital show that some of its growth strategies have backfired, and its falling returns suggest its earlier profit pools are drying up

Dentsply Sirona is trading at $13.88 per share, or 7.3x forward P/E. To fully understand why you should be careful with XRAY, check out our full research report (it’s free).

One Stock to Watch:

Montrose (MEG)

Trailing 12-Month GAAP Operating Margin: -5.3%

Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.

Why Could MEG Be a Winner?

1. Market share has increased this cycle as its 24.4% annual revenue growth over the last five years was exceptional
2. Offerings are difficult to replicate at scale and result in a stellar gross margin of 36.5%
3. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 48.7% annually, topping its revenue gains

At $14.78 per share, Montrose trades at 17.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.