Companies that burn cash at a rapid pace can run into serious trouble if they fail to secure funding. Without a clear path to profitability, these businesses risk dilution, mounting debt, or even bankruptcy.
Just because a company is spending heavily doesn’t mean it’s on the right track, and StockStory is here to separate the winners from the losers. That said, here are three cash-burning companies to steer clear of and a few better alternatives.
fuboTV (FUBO)
Trailing 12-Month Free Cash Flow Margin: -8.6%
Originally launched as a soccer streaming platform, fuboTV (NYSE:FUBO) is a video streaming service specializing in live sports, news, and entertainment content.
Why Does FUBO Worry Us?
- Increasing number of domestic subscribers has helped the company expand its presence
- Historical operating margin losses point to an inefficient cost structure
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $10.15 per share, fuboTV trades at 39.6x forward P/E. Dive into our free research report to see why there are better opportunities than FUBO.
Beyond Meat (BYND)
Trailing 12-Month Free Cash Flow Margin: -46.4%
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.
Why Do We Think BYND Will Underperform?
- Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Cash burn has widened over the last year, making us question whether it can reliably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Beyond Meat is trading at $14.06 per share, or 1.2x forward price-to-sales. If you’re considering BYND for your portfolio, see our FREE research report to learn more.
Dave & Buster's (PLAY)
Trailing 12-Month Free Cash Flow Margin: -1.6%
Founded by a former game parlor and bar operator, Dave & Buster’s (NASDAQ:PLAY) operates a chain of arcades providing immersive entertainment experiences.
Why Is PLAY Risky?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Dave & Buster’s stock price of $9.22 implies a valuation ratio of 8.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why PLAY doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.