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. That said, 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:
Sprinklr (CXM)
Net Cash Position: $411.6 million (25.3% of Market Cap)
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE:CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Why Are We Out on CXM?
- Offerings struggled to generate meaningful interest as its average billings growth of 2.2% over the last year did not impress
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
Sprinklr’s stock price of $7.05 implies a valuation ratio of 2.1x forward price-to-sales. Read our free research report to see why you should think twice about including CXM in your portfolio.
Sonos (SONO)
Net Cash Position: $204.2 million (10.8% of Market Cap)
A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems.
Why Do We Think SONO Will Underperform?
- Products and services have few die-hard fans as sales have declined by 2.6% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 11.5% annually, worse than its revenue
- Poor free cash flow margin of 6.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Sonos is trading at $15.94 per share, or 16.6x forward P/E. If you’re considering SONO for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
CrowdStrike (CRWD)
Net Cash Position: $4.19 billion (2% of Market Cap)
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ:CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
Why Are We Bullish on CRWD?
- Average billings growth of 26% over the last year enhances its liquidity and shows there is steady demand for its products
- Market share will likely rise over the next 12 months as its expected revenue growth of 23.1% is robust
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
At $205.25 per share, CrowdStrike trades at 33.8x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.