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.
Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. That said, here are three unprofitable companiesto steer clear of and a few better alternatives.
Take-Two (TTWO)
Trailing 12-Month GAAP Operating Margin: -64.9%
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ:TTWO) is one of the world’s largest video game publishers.
Why Do We Think Twice About TTWO?
- Estimated sales growth of 5.2% for the next 12 months implies demand will slow from its three-year trend
- Earnings per share fell by 487% annually over the last three years while its revenue grew, partly because it diluted shareholders
- Cash burn makes us question whether it can achieve sustainable long-term growth
Take-Two is trading at $233.57 per share, or 44.9x forward EV/EBITDA. Read our free research report to see why you should think twice about including TTWO in your portfolio.
Plug Power (PLUG)
Trailing 12-Month GAAP Operating Margin: -296%
Powering forklifts for Walmart’s distribution centers, Plug Power (NASDAQ:PLUG) provides hydrogen fuel cells used to power electric motors.
Why Does PLUG Give Us Pause?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 12.8% annually over the last two years
- Cash-burning history makes us doubt the long-term viability of its business model
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $1.99 per share, Plug Power trades at 2.8x forward price-to-sales. To fully understand why you should be careful with PLUG, check out our full research report (it’s free for active Edge members).
Sunrun (RUN)
Trailing 12-Month GAAP Operating Margin: -150%
Helping homeowners use solar energy to power their homes, Sunrun (NASDAQ:RUN) provides residential solar electricity, specializing in panel installation and leasing services.
Why Is RUN Not Exciting?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Sunrun’s stock price of $17.98 implies a valuation ratio of 29.4x forward P/E. Dive into our free research report to see why there are better opportunities than RUN.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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-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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