Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.
Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. That said, here are two unprofitable companies with the potential to become industry leaders and one that may never reach the Promised Land.
One Stock to Sell:
Boston Beer (SAM)
Trailing 12-Month GAAP Operating Margin: -4.7%
Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE:SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.
Why Do We Pass on SAM?
- Products have few die-hard fans as sales have declined by 2.2% annually over the last three years
- Operating margin declined by 9.9 percentage points over the last year as its sales cratered
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $185.92 per share, Boston Beer trades at 18.8x forward P/E. Check out our free in-depth research report to learn more about why SAM doesn’t pass our bar.
Two Stocks to Watch:
SentinelOne (S)
Trailing 12-Month GAAP Operating Margin: -29.9%
Built on the principle of "fighting machine with machine," SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.
Why Are We Fans of S?
- ARR growth averaged 22.8% over the last year, showing customers are willing to take multi-year bets on its software
- Estimated revenue growth of 19.4% for the next 12 months implies its momentum over the last two years will continue
- Free cash flow margin is anticipated to expand by 7.5 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
SentinelOne’s stock price of $23.08 implies a valuation ratio of 6.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Redwire (RDW)
Trailing 12-Month GAAP Operating Margin: -39.5%
Based in Jacksonville, Florida, Redwire (NYSE:RDW) is a provider of systems and components used in space infrastructure.
Why Do We Like RDW?
- Annual revenue growth of 20.8% over the past two years was outstanding, reflecting market share gains this cycle
- Market share will likely rise over the next 12 months as its expected revenue growth of 19.9% is robust
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Redwire is trading at $13.53 per share, or 5.7x forward price-to-sales. Is now the time to initiate a position? Find out 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.