3 Cash-Burning Stocks That Concern Us

Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.

Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. That said, here are three cash-burning companies to steer clear of and a few better alternatives.

Lucid (LCID)

Trailing 12-Month Free Cash Flow Margin: -332%

Founded by a former Tesla Vice President, Lucid Group (NASDAQ:LCID) designs, manufactures, and sells luxury electric vehicles with long-range capabilities.

Why Are We Cautious About LCID?

1. Negative 136% gross margin means it loses money on every sale and must pivot or scale quickly to survive
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Lucid’s stock price of $6.53 implies a valuation ratio of 0.9x forward price-to-sales. If you’re considering LCID for your portfolio, see our FREE research report to learn more.

Applied Digital (APLD)

Trailing 12-Month Free Cash Flow Margin: -509%

Pivoting from its origins in cryptocurrency mining to become a key player in the AI infrastructure boom, Applied Digital (NASDAQ:APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.

Why Are We Hesitant About APLD?

1. Smaller revenue base of $355.5 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy (but also enables it to grow faster if it executes properly)
2. Cash-burning history makes us doubt the long-term viability of its business model
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Applied Digital is trading at $47.18 per share, or 62.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why APLD doesn’t pass our bar.

Bunge Global (BG)

Trailing 12-Month Free Cash Flow Margin: -1.4%

With origins dating back to 1818 and operations spanning both hemispheres to balance seasonal harvests, Bunge Global (NYSE:BG) is an agribusiness and food company that processes oilseeds, grains, and other agricultural commodities into vegetable oils, protein meals, flours, and specialty ingredients.

Why Are We Wary of BG?

1. Annual sales growth of 6.5% over the last three years lagged behind its consumer staples peers as its large revenue base made it difficult to generate incremental demand
2. Incremental sales over the last three years were much less profitable as its earnings per share fell by 17% annually while its revenue grew
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

At $123.41 per share, Bunge Global trades at 12.2x forward P/E. Read our free research report to see why you should think twice about including BG in your portfolio.

Stocks We Like More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.