3 Unprofitable Stocks with Mounting Challenges

Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.

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 three unprofitable companiesthat don’t make the cut and some better opportunities instead.

ChargePoint (CHPT)

Trailing 12-Month GAAP Operating Margin: -58.8%

The most prominent EV charging company during the COVID bull market, ChargePoint (NYSE:CHPT) is a provider of electric vehicle charging technology solutions in North America and Europe.

Why Does CHPT Fall Short?

1. Sales tumbled by 11.2% annually over the last two years, showing market trends are working against its favor during this cycle
2. Negative free cash flow raises questions about the return timeline for its investments
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

ChargePoint’s stock price of $0.72 implies a valuation ratio of 0.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CHPT.

Lucid (LCID)

Trailing 12-Month GAAP Operating Margin: -343%

Founded by a former Tesla Vice President, Lucid Group (NASDAQ:LCID) designs, manufactures, and sells luxury electric vehicles with long-range capabilities.

Why Are We Hesitant About LCID?

1. Negative 161% gross margin means it loses money on every sale and must pivot or scale quickly to survive
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

Lucid is trading at $2.16 per share, or 3.7x forward price-to-sales. To fully understand why you should be careful with LCID, check out our full research report (it’s free).

Vertex Pharmaceuticals (VRTX)

Trailing 12-Month GAAP Operating Margin: -6.7%

Founded in 1989 with a mission to create medicines that treat the underlying causes of disease rather than just symptoms, Vertex Pharmaceuticals (NASDAQ:VRTX) develops and markets transformative medicines for serious diseases, with a focus on cystic fibrosis, sickle cell disease, and pain management.

Why Does VRTX Give Us Pause?

1. Incremental sales over the last five years were much less profitable as its earnings per share fell by 15.6% annually while its revenue grew
2. Free cash flow margin dropped by 58.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Eroding returns on capital suggest its historical profit centers are aging

At $448.01 per share, Vertex Pharmaceuticals trades at 24.3x forward P/E. Check out our free in-depth research report to learn more about why VRTX doesn’t pass our bar.

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today