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 are two companies with net cash positions that balance growth with stability and one best left off your watchlist.
One Stock to Sell:
Olo (OLO)
Net Cash Position: $345.2 million (20.2% of Market Cap)
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE:OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Why Does OLO Worry Us?
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 54.7%, one of the worst among software companies
- Rapid expansion strategy came at the expense of operating margin profitability
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Olo’s stock price of $10.10 implies a valuation ratio of 5.1x forward price-to-sales. Check out our free in-depth research report to learn more about why OLO doesn’t pass our bar.
Two Stocks to Watch:
Doximity (DOCS)
Net Cash Position: $903.3 million (8% of Market Cap)
Founded in 2010 and named for a combination of “docs” and “proximity”, Doximity (NYSE: DOCS) is the leading social network for U.S. medical professionals.
Why Does DOCS Catch Our Eye?
- Average billings growth of 23.5% over the last year enhances its liquidity and shows there is steady demand for its products
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
- DOCS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $60.13 per share, Doximity trades at 19.6x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Reddit (RDDT)
Net Cash Position: $1.92 billion (7.2% of Market Cap)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Bullish on RDDT?
- Domestic Daily Active Visitors are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Earnings per share grew by 31.6% annually over the last three years, massively outpacing its peers
- Free cash flow margin jumped by 38.9 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Reddit is trading at $145.55 per share, or 47.1x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 Tecnoglass (+1,754% 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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