Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.
Negative cash flow can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here are three cash-burning companies to avoid and some better opportunities instead.
Intel (INTC)
Trailing 12-Month Free Cash Flow Margin: -10%
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Do We Pass on INTC?
- Annual sales declines of 7.3% for the past five years show its products and services struggled to connect with the market during this cycle
- Sales were less profitable over the last five years as its earnings per share fell by 40.7% annually, worse than its revenue declines
- Free cash flow margin shrank by 34.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Intel’s stock price of $40.34 implies a valuation ratio of 95.6x forward P/E. Read our free research report to see why you should think twice about including INTC in your portfolio.
Boeing (BA)
Trailing 12-Month Free Cash Flow Margin: -7.9%
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.
Why Do We Avoid BA?
- Disappointing unit sales over the past two years imply it may need to invest in improvements to get back on track
- Cash-burning history makes us doubt the long-term viability of its business model
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
At $188.35 per share, Boeing trades at 269.1x forward P/E. To fully understand why you should be careful with BA, check out our full research report (it’s free for active Edge members).
Acadia Healthcare (ACHC)
Trailing 12-Month Free Cash Flow Margin: -10.6%
With a network of over 250 facilities serving patients in 38 states and Puerto Rico, Acadia Healthcare (NASDAQ: ACHC) operates facilities providing mental health and substance use disorder treatment services across the United States.
Why Does ACHC Give Us Pause?
- Underwhelming admissions over the past two years suggest it might have to lower prices to accelerate growth
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 5.2 percentage points
- Free cash flow margin shrank by 21.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Acadia Healthcare is trading at $17.11 per share, or 7.9x forward P/E. Check out our free in-depth research report to learn more about why ACHC doesn’t pass our bar.
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 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 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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