Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here are three companies with net cash positions to steer clear of and a few alternatives to consider.
Okta (OKTA)
Net Cash Position: $2.04 billion (12.3% of Market Cap)
Named after the meteorological measurement for cloud cover, Okta (NASDAQ: OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Why Are We Wary of OKTA?
- Average billings growth of 10.2% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 9.2% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin is forecasted to shrink by 3.7 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
Okta’s stock price of $93.67 implies a valuation ratio of 5.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than OKTA.
Dillard's (DDS)
Net Cash Position: $785.9 million (7.7% of Market Cap)
With stores located largely in the Southern and Western US, Dillard’s (NYSE: DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Are We Hesitant About DDS?
- Failure to add new stores points to soft demand and a focus on boosting sales at current locations
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
At $651.68 per share, Dillard's trades at 22.6x forward P/E. To fully understand why you should be careful with DDS, check out our full research report (it’s free for active Edge members).
Rogers (ROG)
Net Cash Position: $143.4 million (8.6% of Market Cap)
With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE: ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications.
Why Is ROG Risky?
- Annual sales declines of 7% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share fell by 15.7% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.4 percentage points
Rogers is trading at $93.12 per share, or 31.1x forward P/E. Check out our free in-depth research report to learn more about why ROG doesn’t pass our bar.
Stocks We Like More
Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
