Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.
Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. Keeping that in mind, here is one unprofitable company with the potential to become an industry leader and two that may never reach the Promised Land.
Two Stocks to Sell:
Bumble (BMBL)
Trailing 12-Month GAAP Operating Margin: -83.4%
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Why Does BMBL Fall Short?
- White space opportunities may be dwindling as its growth in paying users averaged a weak 1.5%
- Concerning trends in both user engagement and monetization suggest its platform’s efficacy is declining as its average revenue per buyer fell by 26.5% annually
- Projected sales decline of 11.1% for the next 12 months points to a tough demand environment ahead
Bumble’s stock price of $4.27 implies a valuation ratio of 3.4x forward EV/EBITDA. Check out our free in-depth research report to learn more about why BMBL doesn’t pass our bar.
SolarEdge (SEDG)
Trailing 12-Month GAAP Operating Margin: -25.5%
Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.
Why Are We Out on SEDG?
- Annual sales declines of 4.1% for the past five years show its products and services struggled to connect with the market during this cycle
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
SolarEdge is trading at $38.36 per share, or 1,079.2x forward P/E. Dive into our free research report to see why there are better opportunities than SEDG.
One Stock to Buy:
Planet Labs (PL)
Trailing 12-Month GAAP Operating Margin: -30.9%
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
Why Are We Bullish on PL?
- Backlog has averaged 157% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 65.4% outpaced its revenue gains
- Free cash flow turned positive over the last five years, showing the company is at an important crossroads
Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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.
