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 is one company with a net cash position that can leverage its balance sheet to grow and two best left off your watchlist.
Two Stocks to Sell:
Roku (ROKU)
Net Cash Position: $1.77 billion (12.5% of Market Cap)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Are We Hesitant About ROKU?
- Choice to prioritize new users over monetization has resulted in weak growth in its average revenue per user
- Gross margin of 44.5% reflects its high servicing costs
- Performance over the past three years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue
Roku is trading at $96.55 per share, or 34.1x forward EV/EBITDA. Read our free research report to see why you should think twice about including ROKU in your portfolio.
Zeta Global (ZETA)
Net Cash Position: $168.6 million (3.6% of Market Cap)
Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE:ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.
Why Are We Cautious About ZETA?
- Gross margin of 60.9% reflects its relatively high servicing costs
- Track record of operating margin losses stem from its decision to pursue growth instead of profits
At $19.51 per share, Zeta Global trades at 3.1x forward price-to-sales. To fully understand why you should be careful with ZETA, check out our full research report (it’s free).
One Stock to Watch:
Snowflake (SNOW)
Net Cash Position: $894.4 million (1.1% of Market Cap)
Named after the unique architecture of its data warehouse which resembles a snowflake pattern, Snowflake (NYSE:SNOW) provides a cloud-based data platform that enables organizations to consolidate, analyze, and share data across multiple cloud providers.
Why Does SNOW Stand Out?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 31.2% over the last year
- High switching costs and customer loyalty are evident in its net revenue retention rate of 126%
- Notable projected revenue growth of 24.5% for the next 12 months hints at market share gains
Snowflake’s stock price of $238.30 implies a valuation ratio of 15.6x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 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 Kadant (+351% 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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