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.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
DocuSign (DOCU)
Net Cash Position: $630.8 million (7.4% of Market Cap)
Creating the digital equivalent of "sign on the dotted line" for over a billion users worldwide, DocuSign (NASDAQ: DOCU) provides an agreement management platform that enables businesses to electronically prepare, sign, and manage documents and contracts.
Why Do We Think DOCU Will Underperform?
- Underwhelming ARR growth of 8.5% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $45.06 per share, DocuSign trades at 2.3x forward price-to-sales. Read our free research report to see why you should think twice about including DOCU in your portfolio.
Two Stocks to Watch:
Comfort Systems (FIX)
Net Cash Position: $1.01 billion (1.6% of Market Cap)
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Why Are We Bullish on FIX?
- Average backlog growth of 53.1% over the past two years shows it has a steady sales pipeline that will drive future orders
- Free cash flow margin increased by 9.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Rising returns on capital show management is finding more attractive investment opportunities
Comfort Systems’s stock price of $1,857 implies a valuation ratio of 45.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
BioMarin Pharmaceutical (BMRN)
Net Cash Position: $782.8 million (7.3% of Market Cap)
Pioneering treatments for conditions that often had no previous therapeutic options, BioMarin Pharmaceutical (NASDAQ: BMRN) develops and commercializes therapies that address the root causes of rare genetic disorders, particularly those affecting children.
Why Could BMRN Be a Winner?
- Annual revenue growth of 14.5% over the last two years beat the sector average and underscores the unique value of its offerings
- Market share is on track to rise over the next 12 months as its 28.4% projected revenue growth implies demand will accelerate from its two-year trend
- Free cash flow margin jumped by 5.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
BioMarin Pharmaceutical is trading at $56.05 per share, or 10.2x forward P/E. Is now the right time to buy? Find out 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 meet 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.
