Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are three cash-burning companies that don’t make the cut and some better opportunities instead.
C3.ai (AI)
Trailing 12-Month Free Cash Flow Margin: -76.8%
Named after the three Cs of its original focus—carbon, cloud computing, and customer relationship management—C3.ai (NYSE: AI) provides enterprise AI software that helps organizations develop, deploy, and operate large-scale artificial intelligence applications across various industries.
Why Do We Avoid AI?
- Billings have dropped by 33.8% over the last year, suggesting it might have to lower prices to stimulate growth
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
C3.ai is trading at $9.04 per share, or 5.7x forward price-to-sales. Read our free research report to see why you should think twice about including AI in your portfolio.
Azenta (AZTA)
Trailing 12-Month Free Cash Flow Margin: -1.3%
Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.
Why Is AZTA Risky?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.3% annually over the last two years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Negative free cash flow raises questions about the return timeline for its investments
Azenta’s stock price of $28.84 implies a valuation ratio of 48.5x forward P/E. Dive into our free research report to see why there are better opportunities than AZTA.
ePlus (PLUS)
Trailing 12-Month Free Cash Flow Margin: -4.9%
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Are We Hesitant About PLUS?
- 4.8% annual revenue growth over the last two years was slower than its business services peers
- Annual earnings per share growth of 3.2% underperformed its revenue over the last two years, showing its incremental sales were less profitable
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $89.78 per share, ePlus trades at 17.5x forward P/E. Check out our free in-depth research report to learn more about why PLUS doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
