A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up.
Two Stocks to Sell:
Fiverr (FVRR)
Trailing 12-Month Free Cash Flow Margin: 22.6%
Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.
Why Do We Think Twice About FVRR?
- Struggled with new customer acquisition as its active buyers averaged 12.3% declines
- Estimated sales decline of 7% for the next 12 months implies a challenging demand environment
- Excessive marketing spend signals little organic demand and traction for its platform
Fiverr’s stock price of $10.94 implies a valuation ratio of 1.2x forward price-to-gross profit. Dive into our free research report to see why there are better opportunities than FVRR.
American Eagle (AEO)
Trailing 12-Month Free Cash Flow Margin: 3.3%
With a heavy focus on denim, American Eagle Outfitters (NYSE: AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
Why Does AEO Give Us Pause?
- Sales trends were unexciting over the last three years as its 3.8% annual growth was below the typical consumer retail company
- Slow expansion of stores indicates a strategic shift toward maximizing returns from existing locations
- ROIC of 7.8% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
American Eagle is trading at $17.13 per share, or 9.6x forward P/E. Check out our free in-depth research report to learn more about why AEO doesn’t pass our bar.
One Stock to Watch:
United Rentals (URI)
Trailing 12-Month Free Cash Flow Margin: 12.9%
Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Why Could URI Be a Winner?
- Impressive 14.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Excellent operating margin of 25.9% highlights the efficiency of its business model
- Share buybacks catapulted its annual earnings per share growth to 19.6%, which outperformed its revenue gains over the last five years
At $1,112 per share, United Rentals trades at 23.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
