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.
Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are two cash-producing companies that reinvest wisely to drive long-term success and one best left off your watchlist.
One Stock to Sell:
fuboTV (FUBO)
Trailing 12-Month Free Cash Flow Margin: 8.6%
Originally launched as a soccer streaming platform, fuboTV (NYSE:FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Does FUBO Give Us Pause?
- Number of domestic subscribers has disappointed over the past two years, indicating weak demand for its offerings
- Historical operating margin losses point to an inefficient cost structure
- Free cash flow margin is forecasted to shrink by 10.7 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
fuboTV is trading at $3.52 per share, or 138.5x forward EV-to-EBITDA. To fully understand why you should be careful with FUBO, check out our full research report (it’s free).
Two Stocks to Watch:
SentinelOne (S)
Trailing 12-Month Free Cash Flow Margin: 2.1%
With roots in the Israeli cyber intelligence community, SentinelOne (NYSE:S) provides software to help organizations efficiently detect, prevent, and investigate cyber attacks.
Why Could S Be a Winner?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Projected revenue growth of 21.3% for the next 12 months suggests its momentum from the last three years will persist
- Free cash flow margin is expected to increase by 7 percentage points next year, suggesting the company will have more capital to invest or return to shareholders
SentinelOne’s stock price of $17.92 implies a valuation ratio of 5.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
KLA Corporation (KLAC)
Trailing 12-Month Free Cash Flow Margin: 30.4%
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Will KLAC Beat the Market?
- Market share has increased this cycle as its 15.6% annual revenue growth over the last five years was exceptional
- Excellent operating margin of 35.9% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Robust free cash flow margin of 31.2% gives it many options for capital deployment
At $937.56 per share, KLA Corporation trades at 29.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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