A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one that may struggle.
One Stock to Sell:
Workiva (WK)
Net Cash Position: $68.52 million (2% of Market Cap)
Nicknamed "the Excel killer" by some finance professionals for its ability to eliminate spreadsheet chaos, Workiva (NYSE: WK) provides a cloud-based platform that enables organizations to streamline financial reporting, ESG, and compliance processes with connected data and automation.
Why Do We Think Twice About WK?
- Operating margin expanded by 2.8 percentage points over the last year as it scaled and became more efficient
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 3.1 percentage points over the next year
Workiva’s stock price of $62 implies a valuation ratio of 3.8x forward price-to-sales. To fully understand why you should be careful with WK, check out our full research report (it’s free).
Two Stocks to Buy:
Lyft (LYFT)
Net Cash Position: $646.8 million (12.4% of Market Cap)
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Why Is LYFT a Top Pick?
- Active Riders are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 64.1% annually, topping its revenue gains
- Free cash flow margin grew by 26.3 percentage points over the last few years, giving the company more chips to play with
Lyft is trading at $13.03 per share, or 7.5x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
MercadoLibre (MELI)
Net Cash Position: $3.04 billion (3% of Market Cap)
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Is MELI a Good Business?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 97.8% annual growth in its average revenue per user
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Strong free cash flow margin of 32.7% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $2,001 per share, MercadoLibre trades at 20.5x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
