A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Luckily for you, we built StockStory to help you separate the good from the bad. That said, here are three cash-producing companies to steer clear of and a few better alternatives.

Salesforce (CRM)

Trailing 12-Month Free Cash Flow Margin: 34.7%

With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.

Why Is CRM Not Exciting?

1. Underwhelming ARR growth of 10.3% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
2. Estimated sales growth of 11% for the next 12 months is soft and implies weaker demand
3. Operating margin expanded by 1 percentage points over the last year as it scaled and became more efficient

Salesforce is trading at $181.35 per share, or 3.7x forward price-to-sales. If you’re considering CRM for your portfolio, see our FREE research report to learn more.

Marqeta (MQ)

Trailing 12-Month Free Cash Flow Margin: 23.4%

Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.

Why Does MQ Give Us Pause?

1. Annual sales declines of 3.9% for the past two years show its products and services struggled to connect with the market
2. Gross margin of 70% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs

At $4.20 per share, Marqeta trades at 2.6x forward price-to-sales. To fully understand why you should be careful with MQ, check out our full research report (it’s free).

Ruger (RGR)

Trailing 12-Month Free Cash Flow Margin: 7%

Founded in 1949, Ruger (NYSE: RGR) is an American manufacturer of firearms for the commercial sporting market.

Why Should You Sell RGR?

1. Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
2. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Ruger’s stock price of $43.90 implies a valuation ratio of 21.4x forward P/E. Dive into our free research report to see why there are better opportunities than RGR.

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 meeting 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.