A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
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 is one company with a net cash position that balances growth with stability and two that may struggle.
Two Stocks to Sell:
Agilysys (AGYS)
Net Cash Position: $105.3 million (3.7% of Market Cap)
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Why Is AGYS Not Exciting?
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 63.1%
- Operating margin expanded by 7.2 percentage points over the last year as it scaled and became more efficient
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 4.8 percentage points over the next year
Agilysys’s stock price of $100.24 implies a valuation ratio of 7.1x forward price-to-sales. If you’re considering AGYS for your portfolio, see our FREE research report to learn more.
CTS (CTS)
Net Cash Position: $17.65 million (1% of Market Cap)
With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE: CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.
Why Are We Cautious About CTS?
- Muted 2.7% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Modest revenue base of $564.3 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
CTS is trading at $59.79 per share, or 22x forward P/E. To fully understand why you should be careful with CTS, check out our full research report (it’s free).
One Stock to Watch:
Coastal Financial (CCB)
Net Cash Position: $1.00 billion (162% of Market Cap)
Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.
Why Are We Positive on CCB?
- Market share has increased this cycle as its 37.2% annual net interest income growth over the last five years was exceptional
- High-yielding loan book and low cost of funds result in a best-in-class net interest margin of 7.2%
- Anticipated efficiency ratio improvement over the next year signals it will gain leverage on its fixed costs and become more productive
At $40.57 per share, Coastal Financial trades at 1.2x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
