A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
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. Keeping that in mind, here are two companies with net cash positions that can continue growing sustainably and one with hidden risks.
One Stock to Sell:
Korn Ferry (KFY)
Net Cash Position: $286.9 million (7.8% of Market Cap)
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Are We Hesitant About KFY?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.3% annually over the last two years
- Estimated sales growth of 2.7% for the next 12 months is soft and implies weaker demand
- Eroding returns on capital suggest its historical profit centers are aging
Korn Ferry’s stock price of $70.28 implies a valuation ratio of 13.4x forward P/E. Dive into our free research report to see why there are better opportunities than KFY.
Two Stocks to Watch:
Lyft (LYFT)
Net Cash Position: $1.10 billion (13.1% of Market Cap)
Founded by Logan Green and John Zimmer as a long-distance intercity carpooling company Zimride, Lyft (NASDAQ: LYFT) operates a ridesharing network in the US and Canada.
Why Are We Fans of LYFT?
- Has the opportunity to boost monetization through new features and premium offerings as its active riders have grown by 10.3% annually over the last two years
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 39.2% outpaced its revenue gains
- Free cash flow margin increased by 23.7 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $20.69 per share, Lyft trades at 15.1x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Upwork (UPWK)
Net Cash Position: $265.4 million (12.4% of Market Cap)
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Is UPWK a Good Business?
- Monetization efforts are paying off as its average revenue per customer has grown by 8.9% annually over the last two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 166% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 31.3 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Upwork is trading at $16.55 per share, or 10.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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