1 Unprofitable Stock on Our Buy List and 2 We Question

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.

Finding the right unprofitable companies is difficult, which is why we started StockStory — to help you navigate the market. That said, here is one unprofitable company investing heavily to secure market share and two that could struggle to survive.

Two Stocks to Sell:

Opendoor (OPEN)

Trailing 12-Month GAAP Operating Margin: -9.9%

Founded by real estate guru Eric Wu, Opendoor (NASDAQ:OPEN) offers a technology-driven, convenient, and streamlined process to buy and sell homes.

Why Do We Avoid OPEN?

1. Performance surrounding its homes sold has lagged its peers
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes

Opendoor is trading at $5.09 per share, or 233.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than OPEN.

ACV Auctions (ACVA)

Trailing 12-Month GAAP Operating Margin: -7.4%

Founded in 2014, ACV Auctions (NYSE:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Are We Hesitant About ACVA?

1. High servicing costs result in an inferior gross margin of 27.3% that must be offset through higher volumes
2. Excessive marketing spend signals little organic demand and traction for its platform

ACV Auctions’s stock price of $6.36 implies a valuation ratio of 11x forward EV/EBITDA. If you’re considering ACVA for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

GitLab (GTLB)

Trailing 12-Month GAAP Operating Margin: -7.4%

With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ:GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.

Why Are We Backing GTLB?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 26.4% growth over the last year
2. 120% net revenue retention rate indicates success in expanding revenue within existing accounts
3. Software is difficult to replicate at scale and results in a best-in-class gross margin of 87.4%

At $28.37 per share, GitLab trades at 4x 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

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.