Rapid spending isn’t always a sign of progress. Some cash-burning businesses fail to convert investments into meaningful competitive advantages, leaving them vulnerable.

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 is one high-risk, high-reward company with the potential to scale into a market leader and two that may struggle to stay afloat.

Two Stocks to Sell:

iHeartMedia (IHRT)

Trailing 12-Month Free Cash Flow Margin: -342%

Occasionally featuring celebrity hosts like Ryan Seacrest on its shows, iHeartMedia (NASDAQ: IHRT) is a leading multimedia company renowned for its extensive network of radio stations, digital platforms, and live events across the globe.

Why Should You Dump IHRT?

1. Products and services fail to spark excitement with consumers, as seen in its flat sales over the last two years
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

At $2.27 per share, iHeartMedia trades at 0.5x forward EV-to-EBITDA. If you’re considering IHRT for your portfolio, see our FREE research report to learn more.

JELD-WEN (JELD)

Trailing 12-Month Free Cash Flow Margin: -4.6%

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 Sell JELD?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

JELD-WEN’s stock price of $5.88 implies a valuation ratio of 92.9x forward P/E. To fully understand why you should be careful with JELD, check out our full research report (it’s free).

One Stock to Watch:

AeroVironment (AVAV)

Trailing 12-Month Free Cash Flow Margin: -2.9%

Focused on the future of autonomous military combat, AeroVironment (NASDAQ: AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.

Why Do We Watch AVAV?

1. Market share has increased this cycle as its 23.2% annual revenue growth over the last two years was exceptional
2. Market share is on track to rise over the next 12 months as its 144% projected revenue growth implies demand will accelerate from its two-year trend
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 63.4% annually

AeroVironment is trading at $250.50 per share, or 64.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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