Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here is one company with a net cash position that balances growth with stability and two with hidden risks.
Two Stocks to Sell:
EVgo (EVGO)
Net Cash Position: $90.98 million (15.7% of Market Cap)
Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ: EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.
Why Are We Cautious About EVGO?
- Earnings per share have dipped by 30.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
EVgo’s stock price of $4.35 implies a valuation ratio of 34.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than EVGO.
Root (ROOT)
Net Cash Position: $442.4 million (36.9% of Market Cap)
Pioneering a data-driven approach that rewards good driving habits, Root (NASDAQ: ROOT) is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.
Why Does ROOT Give Us Pause?
- Annual book value per share declines of 158% for the past five years show its capital management struggled during this cycle
- Negative return on equity shows management lost money while trying to expand the business
At $77.96 per share, Root trades at 3.7x forward P/B. If you’re considering ROOT for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Braze (BRZE)
Net Cash Position: $280.5 million (9.2% of Market Cap)
With its technology powering interactions with 6.2 billion monthly active users across the digital landscape, Braze (NASDAQ: BRZE) provides a platform that helps brands build and maintain direct relationships with their customers through personalized, cross-channel messaging and engagement.
Why Are We Positive On BRZE?
- Average billings growth of 24.4% over the last year enhances its liquidity and shows there is steady demand for its products
- Customers tend to stick around and use its software more over time as its net revenue retention rate clocks in at 110%
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
Braze is trading at $27.60 per share, or 3.8x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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
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