2 Unprofitable Stocks for Long-Term Investors and 1 We Ignore

Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here are two unprofitable companies that could turn today’s losses into long-term gains and one that may never reach the Promised Land.

One Stock to Sell:

Stitch Fix (SFIX)

Trailing 12-Month GAAP Operating Margin: -2.1%

One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.

Why Do We Avoid SFIX?

1. Number of active clients has disappointed over the past two years, indicating weak demand for its offerings
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $4.15 per share, Stitch Fix trades at 8.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why SFIX doesn’t pass our bar.

Two Stocks to Buy:

FuelCell Energy (FCEL)

Trailing 12-Month GAAP Operating Margin: -136%

Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.

Why Is FCEL a Top Pick?

1. Annual revenue growth of 38.8% over the past two years was outstanding, reflecting market share gains this cycle
2. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 40.6% annually
3. Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business

FuelCell Energy is trading at $18.08 per share, or 5.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Hims & Hers Health (HIMS)

Trailing 12-Month GAAP Operating Margin: -1.3%

Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE:HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.

Why Should You Buy HIMS?

1. Customer trends over the past two years show it’s maintaining a steady flow of new contracts that can potentially increase in value over time
2. Free cash flow margin grew by 16.1 percentage points over the last five years, giving the company more chips to play with
3. Improving returns on capital suggest its past investments are beginning to deliver value

Hims & Hers Health’s stock price of $24.86 implies a valuation ratio of 2.2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.