2 Losing Stocks We’re Still Buying and 1 We’re Passing On

Investing in Unprofitable Companies: Risks and Opportunities

Companies that have yet to achieve profitability can rapidly deplete their cash reserves, putting investors at risk if these businesses fail to shift their financial trajectory. Without a clear strategy to reach profitability, such firms may exhaust their funds or be forced to raise additional capital, often at the expense of existing shareholders through dilution.

Identifying promising unprofitable companies is no easy task. That's why StockStory was created—to guide you through the complexities of the market. With that in mind, here are two unprofitable businesses that could emerge as industry frontrunners, along with one that may be best avoided.

Stock to Avoid

Myriad Genetics (MYGN)

Latest 12-Month GAAP Operating Margin: -47%

Established in 1991, Myriad Genetics (NASDAQ:MYGN) was among the first to bring genetic research into clinical practice. The company specializes in genetic testing to assess disease risk, inform treatment options, and provide insights across fields such as oncology, women’s health, and mental health.

Reasons for Caution on MYGN:

• Annual revenue growth of 4.6% over the past two years has lagged behind other healthcare companies.
• Negative returns on capital indicate that management has struggled to generate profits while expanding, and declining returns suggest that their main profit sources are losing momentum.
• Returns on capital, already low, have deteriorated further, signaling that recent investments may be eroding value.

Currently, Myriad Genetics trades at $5.13 per share, equating to a forward P/E ratio of 77.6.

Stocks with Growth Potential

Datadog (DDOG)

Latest 12-Month GAAP Operating Margin: -1.3%

Datadog (NASDAQ:DDOG), named after a database the founders managed at a previous venture, delivers a software platform that enables organizations to monitor and secure their cloud-based applications, infrastructure, and services.

Why Consider DDOG?

• Annual recurring revenue (ARR) has grown by an average of 27.6% over the past year, indicating strong customer commitment to long-term contracts.
• The company boasts an impressive gross margin of 80%, reflecting both the strength of its software and efficient service delivery.
• Quick returns on sales and marketing investments allow Datadog to aggressively expand its customer base.

Datadog shares are priced at $122.50, representing a forward price-to-sales ratio of 10.5.

Fluence Energy (FLNC)

Latest 12-Month GAAP Operating Margin: -2.2%

Fluence (NASDAQ:FLNC) has been a trailblazer in deploying lithium-ion battery systems for grid-scale energy storage, supporting the integration of renewable energy sources.

Why We’re Optimistic About FLNC:

• The company’s sales pipeline is robust, with its order backlog growing at an average rate of 18.1% over the last two years.
• Fluence’s earnings per share have surged, compounding at 36.4% annually over the past four years—far outpacing industry peers.
• Cash burn has moderated over the last five years, suggesting progress toward financial stability.

Fluence Energy is currently valued at $15.67 per share, translating to a forward P/E of 213.3.

Additional Stock Picks Worth Your Attention

Bonus: This Week’s Top 6 Stock Picks. The current market is quickly distinguishing high-quality stocks from overpriced ones, with AI-driven shifts impacting entire sectors unexpectedly. In such a fast-moving environment, you need more than just a list of decent companies.

Our AI platform identified Palantir before its 1,662% surge, AppLovin ahead of its 753% rally, and Nvidia before its 1,178% climb. Every week, it highlights six new stocks that meet the same rigorous criteria.

Past selections from 2020 include well-known names like Nvidia (up 1,326% from June 2020 to June 2025) and lesser-known companies such as Kadant, which delivered a 351% five-year return.