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1 Unprofitable Stock to Target This Week and 2 We Question
Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
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 that could turn today’s losses into long-term gains and two that could struggle to survive.
Two Stocks to Sell:
Procore Technologies (PCOR)
Trailing 12-Month GAAP Operating Margin: -4.9%
With a mission to build software for the people that build the world, Procore Technologies (NYSE:PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.
Why Does PCOR Give Us Pause?
- Estimated sales growth of 13.4% for the next 12 months implies demand will slow from its two-year trend
- Persistent operating margin losses suggest the business manages its expenses poorly
Procore Technologies is trading at $49.59 per share, or 4.6x forward price-to-sales. If you’re considering PCOR for your portfolio, see our FREE research report to learn more.
Coty (COTY)
Trailing 12-Month GAAP Operating Margin: -1.4%
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Are We Bearish on COTY?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Forecasted revenue decline of 1.2% for the upcoming 12 months implies demand will fall off a cliff
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 26.6% annually
At $2.68 per share, Coty trades at 8.4x forward P/E. Check out our free in-depth research report to learn more about why COTY doesn’t pass our bar.
One Stock to Buy:
Natera (NTRA)
Trailing 12-Month GAAP Operating Margin: -10.7%
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ:NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Will NTRA Outperform?
- Average unit sales growth of 19.3% over the past two years reflects steady demand for its products
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 18.2% annually
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
Natera’s stock price of $413.69 implies a valuation ratio of 18.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.