While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are three cash-producing companies that don’t make the cut and some better opportunities instead.
ZoomInfo (GTM)
Trailing 12-Month Free Cash Flow Margin: 33.3%
Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ: GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.
Why Do We Steer Clear of GTM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 1% average billings growth over the last year was weak
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Efficiency rose over the last year as its Operating margin increased by 5.1 percentage points
At $10.01 per share, ZoomInfo trades at 2.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GTM.
Covenant Logistics (CVLG)
Trailing 12-Month Free Cash Flow Margin: 1.5%
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ: CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.
Why Do We Avoid CVLG?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Free cash flow margin dropped by 12.3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital suggest its historical profit centers are aging
Covenant Logistics’s stock price of $26.15 implies a valuation ratio of 14.4x forward P/E. Check out our free in-depth research report to learn more about why CVLG doesn’t pass our bar.
Fastly (FSLY)
Trailing 12-Month Free Cash Flow Margin: 5%
Taking its name from the core advantage it delivers to customers, Fastly (NYSE: FSLY) operates an edge cloud platform that processes, secures, and delivers web content as close to end users as possible, enabling faster digital experiences.
Why Should You Sell FSLY?
- Net revenue retention rate of 103% trails the industry benchmark of 110%+ and shows it has a tough time increasing customer spending
- Sky-high servicing costs result in an inferior gross margin of 55% that must be offset through increased usage
- Persistent operating margin losses suggest the business manages its expenses poorly
Fastly is trading at $9.22 per share, or 2.1x forward price-to-sales. If you’re considering FSLY for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
