Companies with more cash than debt often have stronger financial flexibility, making them attractive in uncertain markets. Without interest payments being less of a worry, these businesses can invest more in growth, innovation, or buybacks and dividends.
Not all companies with sound capital structures are created equal, and StockStory is here to help you find the best. That said, here are three companies with net cash positions that can leverage their balance sheets to grow.
Cloudflare (NET)
Net Cash Position: $497.6 million (0.7% of Market Cap)
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE: NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
Why Should You Buy NET?
- Average billings growth of 30.3% over the last year enhances its liquidity and shows there is steady demand for its products
- Notable projected revenue growth of 26.3% for the next 12 months hints at market share gains
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Cloudflare is trading at $219.08 per share, or 31.3x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Semrush (SEMR)
Net Cash Position: $245.7 million (23.4% of Market Cap)
Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE: SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media.
Why Does SEMR Stand Out?
- Billings have averaged 23% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Prominent and differentiated software leads to a stellar gross margin of 81.4%
- Free cash flow margin is anticipated to expand by 7.1 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
At $7.07 per share, Semrush trades at 2.2x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
UMB Financial (UMBF)
Net Cash Position: $8.26 billion (96.3% of Market Cap)
With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ: UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers.
Why Do We Like UMBF?
- Annual net interest income growth of 19.7% over the last five years was superb and indicates its market share increased during this cycle
- Productivity and efficiency ratio profits are expected to increase next year as some fixed cost leverage kicks in
- Earnings per share grew by 15.3% annually over the last two years and trumped its peers
UMB Financial’s stock price of $113.02 implies a valuation ratio of 1.2x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
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