While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth. A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.

Negative cash flow 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 three cash-burning companies that don’t make the cut and some better opportunities instead.

Zevia (ZVIA)

Trailing 12-Month Free Cash Flow Margin: -4%

With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE: ZVIA) is a better-for-you beverage company.

Why Are We Cautious About ZVIA?

1. Flat sales over the last three years suggest it must innovate and find new ways to grow
2. Revenue base of $162.8 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Historical operating margin losses point to an inefficient cost structure

Zevia’s stock price of $2.34 implies a valuation ratio of 264.4x forward EV-to-EBITDA. To fully understand why you should be careful with ZVIA, check out our full research report (it’s free for active Edge members).

Avis Budget Group (CAR)

Trailing 12-Month Free Cash Flow Margin: -8.3%

The parent company of brands such as Zipcar and Budget Truck Rental, Avis (NASDAQ: CAR) is a provider of car rental and mobility solutions.

Why Does CAR Worry Us?

1. Number of available rental days - car rental has disappointed over the past two years, indicating weak demand for its offerings
2. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Avis Budget Group is trading at $134.84 per share, or 16.4x forward P/E. Dive into our free research report to see why there are better opportunities than CAR.

Genco (GNK)

Trailing 12-Month Free Cash Flow Margin: -10.7%

Headquartered in NYC, Genco (NYSE: GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.

Why Do We Think GNK Will Underperform?

1. Demand for its offerings was relatively low as its number of owned vessels has underwhelmed
2. Sales were less profitable over the last two years as its earnings per share fell by 46.6% annually, worse than its revenue declines
3. Free cash flow margin dropped by 23.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $18.57 per share, Genco trades at 12.5x forward P/E. Check out our free in-depth research report to learn more about why GNK doesn’t pass our bar.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.