1 Cash-Producing Stock to Target This Week and 2 That Underwhelm

While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.

Two Stocks to Sell:

Zillow (ZG)

Trailing 12-Month Free Cash Flow Margin: 9.2%

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.

Why Do We Steer Clear of ZG?

1. Products and services have few die-hard fans as sales have declined by 6.7% annually over the last five years
2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 5.8% annually
3. Poor free cash flow margin of 11.6% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

At $34.07 per share, Zillow trades at 13.2x forward P/E. Dive into our free research report to see why there are better opportunities than ZG.

Herc (HRI)

Trailing 12-Month Free Cash Flow Margin: 8.2%

Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.

Why Are We Cautious About HRI?

1. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 7 percentage points
2. Issuance of new shares over the last two years caused its earnings per share to fall by 30.3% annually while its revenue grew
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Herc’s stock price of $169.74 implies a valuation ratio of 20.4x forward P/E. To fully understand why you should be careful with HRI, check out our full research report (it’s free).

One Stock to Buy:

CBIZ (CBZ)

Trailing 12-Month Free Cash Flow Margin: 9.9%

With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE:CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.

Why Are We Bullish on CBZ?

1. Annual revenue growth of 29.4% 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 23.5% annually
3. Free cash flow margin grew by 3.3 percentage points over the last five years, giving the company more chips to play with

CBIZ is trading at $54.43 per share, or 13.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.