A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one that may struggle.
One Stock to Sell:
Alarm.com (ALRM)
Net Cash Position: $460 million (16.3% of Market Cap)
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ: ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Why Is ALRM Not Exciting?
- Offerings struggled to generate meaningful interest as its average billings growth of 7.4% over the last year did not impress
- Estimated sales growth of 3.7% for the next 12 months implies demand will slow from its three-year trend
- Gross margin of 65.8% reflects its relatively high servicing costs
Alarm.com’s stock price of $56.56 implies a valuation ratio of 3.4x forward price-to-sales. Check out our free in-depth research report to learn more about why ALRM doesn’t pass our bar.
Two Stocks to Watch:
LegalZoom (LZ)
Net Cash Position: $202.6 million (10.7% of Market Cap)
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Does LZ Stand Out?
- Subscription Units have increased by an average of 11.7% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Share buybacks catapulted its annual earnings per share growth to 177%, which outperformed its revenue gains over the last three years
- Free cash flow margin grew by 14.9 percentage points over the last few years, giving the company more chips to play with
LegalZoom is trading at $10.50 per share, or 10.7x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Ameris Bancorp (ABCB)
Net Cash Position: $660.3 million (13% of Market Cap)
Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.
Why Do We Like ABCB?
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 15% over the last two years outstripped its revenue performance
- Impressive 14.6% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
- Industry-leading 11.3% return on equity demonstrates management’s skill in finding high-return investments
At $74.63 per share, Ameris Bancorp trades at 1.3x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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 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
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