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.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are two companies with net cash positions that can continue growing sustainably and one that may struggle.
One Stock to Sell:
Salesforce (CRM)
Net Cash Position: $184 million (0.1% of Market Cap)
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Are We Wary of CRM?
- Average ARR growth of 9.1% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Anticipated sales growth of 11.8% for the next year implies demand will be shaky
- Operating margin expanded by 1.7 percentage points over the last year as it scaled and became more efficient
At $199.93 per share, Salesforce trades at 4.1x forward price-to-sales. Check out our free in-depth research report to learn more about why CRM doesn’t pass our bar.
Two Stocks to Watch:
Cadence Design Systems (CDNS)
Net Cash Position: $274.1 million (0.4% of Market Cap)
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Could CDNS Be a Winner?
- Billings have averaged 21.8% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Software is difficult to replicate at scale and results in a best-in-class gross margin of 86.6%
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
Cadence Design Systems’s stock price of $271.71 implies a valuation ratio of 12.8x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Nextpower (NXT)
Net Cash Position: $952.6 million (5.5% of Market Cap)
With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextpower (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.
Why Are We Bullish on NXT?
- Average backlog growth of 42.3% over the past two years shows it has a steady sales pipeline that will drive future orders
- Free cash flow margin jumped by 22.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Nextpower is trading at $116.78 per share, or 26.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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 Strong Momentum Stocks for this week. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
