Companies that burn cash at a rapid pace can run into serious trouble if they fail to secure funding. Without a clear path to profitability, these businesses risk dilution, mounting debt, or even bankruptcy.

Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. That said, here is one high-risk, high-reward company with the potential to scale into a market leader and two that may struggle to stay afloat.

Two Stocks to Sell:

Graphic Packaging Holding (GPK)

Trailing 12-Month Free Cash Flow Margin: -4.5%

Founded in 1991, Graphic Packaging (NYSE: GPK) is a provider of paper-based packaging solutions for a wide range of products.

Why Are We Out on GPK?

1. Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Earnings per share have contracted by 10.4% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. Free cash flow margin dropped by 8.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $20.71 per share, Graphic Packaging Holding trades at 9.5x forward P/E. To fully understand why you should be careful with GPK, check out our full research report (it’s free).

SolarEdge (SEDG)

Trailing 12-Month Free Cash Flow Margin: -10.3%

Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.

Why Should You Dump SEDG?

1. Number of megawatts shipped has disappointed over the past two years, indicating weak demand for its offerings
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

SolarEdge is trading at $29.70 per share, or 1.3x forward price-to-sales. Check out our free in-depth research report to learn more about why SEDG doesn’t pass our bar.

One Stock to Watch:

Take-Two (TTWO)

Trailing 12-Month Free Cash Flow Margin: -1%

Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ: TTWO) is one of the world’s largest video game publishers.

Why Does TTWO Catch Our Eye?

1. Platform and reputation resonate with consumers, as seen in its above-market 15.2% annual sales growth over the last three years
2. Demand for the next 12 months is expected to accelerate above its three-year trend as Wall Street forecasts robust revenue growth of 33.7%
3. Excellent EBITDA margin of 14.3% highlights the efficiency of its business model

Take-Two’s stock price of $244.60 implies a valuation ratio of 31x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 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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