While some companies burn cash to fuel expansion, others struggle to turn spending into sustainable growth. A high cash burn rate without a strong balance sheet can leave investors exposed to significant downside.
Not all companies are worth the risk, and that’s why we built StockStory - to help you spot the red flags. That said, here is one high-risk, high-reward company with the potential to scale into a market leader and two to leave off your radar.
Two Stocks to Sell:
Norwegian Cruise Line (NCLH)
Trailing 12-Month Free Cash Flow Margin: -10.7%
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.
Why Do We Think NCLH Will Underperform?
- Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Norwegian Cruise Line’s stock price of $21.65 implies a valuation ratio of 8.8x forward P/E. Check out our free in-depth research report to learn more about why NCLH doesn’t pass our bar.
PAR Technology (PAR)
Trailing 12-Month Free Cash Flow Margin: -4.7%
Originally founded in 1968 as a defense contractor for the U.S. government, PAR Technology (NYSE:PAR) provides cloud-based software, payment processing, and hardware solutions that help restaurants manage everything from point-of-sale to customer loyalty programs.
Why Does PAR Worry Us?
- Negative free cash flow raises questions about the return timeline for its investments
- Push for growth has led to negative returns on capital, signaling value destruction
- High net-debt-to-EBITDA ratio of 14× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $22.14 per share, PAR Technology trades at 58.7x forward P/E. If you’re considering PAR for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
FTAI Aviation (FTAI)
Trailing 12-Month Free Cash Flow Margin: -48.7%
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
Why Will FTAI Outperform?
- Impressive 43.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 82.4% over the last two years outstripped its revenue performance
- Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day
FTAI Aviation is trading at $253.86 per share, or 43.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.