Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.
Finding the right unprofitable companies is difficult, which is why we started StockStory - to help you navigate the market. That said, here are three unprofitable companiesthat don’t make the cut and some better opportunities instead.
Intel (INTC)
Trailing 12-Month GAAP Operating Margin: -22.8%
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Why Do We Avoid INTC?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.6% annually over the last five years
- Inability to adjust its cost structure while its revenue declined over the last five years led to a 49.2 percentage point drop in the company’s operating margin
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 39.4 percentage points
At $24.85 per share, Intel trades at 79.2x forward P/E. Dive into our free research report to see why there are better opportunities than INTC.
Roku (ROKU)
Trailing 12-Month GAAP Operating Margin: -3.5%
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Is ROKU Not Exciting?
- Choice to prioritize new users over monetization has resulted in weak growth in its average revenue per user
- Gross margin of 44.5% reflects its high servicing costs
- Annual earnings per share growth of 6.5% underperformed its revenue over the last three years, partly because it diluted shareholders
Roku’s stock price of $93.55 implies a valuation ratio of 33.2x forward EV/EBITDA. Read our free research report to see why you should think twice about including ROKU in your portfolio.
Kura Sushi (KRUS)
Trailing 12-Month GAAP Operating Margin: -4.5%
Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ: KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.
Why Does KRUS Worry Us?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Increased cash burn over the last year raises questions about the return timeline for its investments
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Kura Sushi is trading at $80.24 per share, or 44.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why KRUS doesn’t pass our bar.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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