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1 Unprofitable Stock to Keep an Eye On and 2 We Turn Down

HUBS Cover Image

Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.

Unprofitable companies face an uphill battle, but not all are created equal. Luckily for you, StockStory is here to separate the promising ones from the weak. Keeping that in mind, here is one unprofitable company investing heavily to secure market share and two that may never reach the Promised Land.

Two Stocks to Sell:

JELD-WEN (JELD)

Trailing 12-Month GAAP Operating Margin: -8.8%

Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE: JELD) manufactures doors, windows, and other related building products.

Why Should You Dump JELD?

  1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
  2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
  3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

JELD-WEN is trading at $6.37 per share, or 100.6x forward P/E. If you’re considering JELD for your portfolio, see our FREE research report to learn more.

Jazz Pharmaceuticals (JAZZ)

Trailing 12-Month GAAP Operating Margin: -7.1%

Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.

Why Are We Out on JAZZ?

  1. Muted 4.2% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
  2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 25.4 percentage points
  3. Earnings per share fell by 12.1% annually over the last five years while its revenue grew, partly because it diluted shareholders

At $124.59 per share, Jazz Pharmaceuticals trades at 6.5x forward P/E. Dive into our free research report to see why there are better opportunities than JAZZ.

One Stock to Watch:

HubSpot (HUBS)

Trailing 12-Month GAAP Operating Margin: -2.5%

Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE: HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.

Why Are We Fans of HUBS?

  1. Billings growth has averaged 21.3% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
  2. Estimated revenue growth of 16.9% for the next 12 months implies its momentum over the last three years will continue
  3. Prominent and differentiated software results in a premier gross margin of 84.6%

HubSpot’s stock price of $468.11 implies a valuation ratio of 7.4x 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

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