Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two that may face some trouble.
Two Stocks to Sell:
Upland Software (UPLD)
Trailing 12-Month Free Cash Flow Margin: 11.1%
Operating under the mantra "land and expand," Upland Software (NASDAQ: UPLD) provides cloud-based applications that help organizations manage projects, workflows, and digital transformation across various business functions.
Why Do We Think Twice About UPLD?
- Sales tumbled by 3.4% annually over the last five years, showing industry trends like AI are working against its favor
- Forecasted revenue decline of 14% for the upcoming 12 months implies demand will fall even further
- Low free cash flow margin of 11.1% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Upland Software is trading at $1.44 per share, or 0.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than UPLD.
PROG (PRG)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Evolving from its origins as Aaron's, Inc. before rebranding in 2020, PROG Holdings (NYSE: PRG) provides alternative payment solutions including lease-to-own options and second-look credit products for consumers who may not qualify for traditional financing.
Why Do We Avoid PRG?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Sales over the last five years were less profitable as its earnings per share fell by 6.2% annually while its revenue was flat
- Tangible book value per share tumbled by 12.9% annually over the last five years, showing financials sector trends are working against its favor during this cycle
At $29.49 per share, PROG trades at 8.8x forward P/E. To fully understand why you should be careful with PRG, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Payoneer (PAYO)
Trailing 12-Month Free Cash Flow Margin: 14.6%
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Is PAYO a Good Business?
- Annual revenue growth of 28.2% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 56.2% exceeded its revenue gains over the last two years
Payoneer’s stock price of $5.64 implies a valuation ratio of 19.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 Tecnoglass (+1,754% 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.
