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 is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.
Two Stocks to Sell:
Box (BOX)
Net Cash Position: $103.6 million (2.2% of Market Cap)
Known as the "Content Cloud" for managing the 90% of business data that exists as unstructured files and documents, Box (NYSE:BOX) provides a cloud-based platform that enables organizations to securely manage, share, and collaborate on their content from anywhere on any device.
Why Are We Cautious About BOX?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 10% underwhelmed
- Projected sales growth of 7.9% for the next 12 months suggests sluggish demand
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Box is trading at $32.20 per share, or 4x forward price-to-sales. To fully understand why you should be careful with BOX, check out our full research report (it’s free).
Grid Dynamics (GDYN)
Net Cash Position: $321.5 million (48.9% of Market Cap)
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ:GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
Why Do We Think Twice About GDYN?
- Revenue base of $389.2 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 3.3% annually
- Negative returns on capital show that some of its growth strategies have backfired
At $7.66 per share, Grid Dynamics trades at 17.4x forward P/E. If you’re considering GDYN for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Coinbase (COIN)
Net Cash Position: $9.22 billion (10.5% of Market Cap)
Widely regarded as the face of crypto, Coinbase (NASDAQ:COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.
Why Will COIN Beat the Market?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 56.8% annual growth in its average revenue per user
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 96.4% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Coinbase’s stock price of $344 implies a valuation ratio of 28.7x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 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-small-cap company Exlservice (+354% 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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