3 Unprofitable Stocks Skating on Thin Ice

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.

Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. That said, here are three unprofitable companies to avoid and some better opportunities instead.

Beyond Meat (BYND)

Trailing 12-Month GAAP Operating Margin: -49.7%

A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.

Why Do We Avoid BYND?

1. Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Beyond Meat is trading at $3.16 per share, or 0.8x forward price-to-sales. Check out our free in-depth research report to learn more about why BYND doesn’t pass our bar.

Bally's (BALY)

Trailing 12-Month GAAP Operating Margin: -8.3%

Headquartered in Providence, Rhode Island, Bally's Corporation (NYSE:BALY) is a diversified global casino-entertainment company that owns and manages casinos, resorts, and online gaming platforms.

Why Are We Out on BALY?

1. Lackluster 2.9% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $9.24 per share, Bally's trades at 1.8x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including BALY in your portfolio.

Xerox (XRX)

Trailing 12-Month GAAP Operating Margin: -15.4%

Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ:XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.

Why Should You Dump XRX?

1. Annual sales declines of 6.7% for the past five years show its products and services struggled to connect with the market during this cycle
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Xerox’s stock price of $5.38 implies a valuation ratio of 5.3x forward P/E. If you’re considering XRX for your portfolio, see our FREE research report to learn more.

Stocks We Like More

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.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.