A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here are three companies with net cash positions to avoid and some better alternatives instead.
Marqeta (MQ)
Net Cash Position: $591.7 million (31.8% of Market Cap)
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ:MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Do We Think Twice About MQ?
- Sales tumbled by 12.1% annually over the last two years, showing industry trends like AI are working against its favor
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 70.6%
- Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
Marqeta is trading at $4.24 per share, or 2.6x forward price-to-sales. Read our free research report to see why you should think twice about including MQ in your portfolio.
Flywire (FLYW)
Net Cash Position: $362.3 million (26.4% of Market Cap)
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ:FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Are We Hesitant About FLYW?
- Gross margin of 61.3% reflects its relatively high servicing costs
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Flywire’s stock price of $11.25 implies a valuation ratio of 2.1x forward price-to-sales. To fully understand why you should be careful with FLYW, check out our full research report (it’s free).
Hope Bancorp (HOPE)
Net Cash Position: $449.1 million (28% of Market Cap)
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ:HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Why Do We Steer Clear of HOPE?
- Loans are facing end-market challenges during this cycle, as seen in its flat net interest income over the last five years
- Flat earnings per share over the last five years lagged its peers
- Products and services are facing profitability challenges during this cycle, as seen in its flat tangible book value per share over the last two years
At $12.52 per share, Hope Bancorp trades at 0.7x forward P/B. Dive into our free research report to see why there are better opportunities than HOPE.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
