A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one best left off your watchlist.
One Stock to Sell:
ACV Auctions (ACVA)
Net Cash Position: $76.27 million (8.6% of Market Cap)
Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
Why Is ACVA Not Exciting?
- Gross margin of 27.1% reflects its high servicing costs
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.6% for the last two years
ACV Auctions’s stock price of $5.11 implies a valuation ratio of 10.6x forward EV/EBITDA. To fully understand why you should be careful with ACVA, check out our full research report (it’s free).
Two Stocks to Watch:
Guidewire Software (GWRE)
Net Cash Position: $214.2 million (1.8% of Market Cap)
With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE: GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.
Why Do We Love GWRE?
- Billings growth has averaged 21.1% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Free cash flow generation is better than most peers and allows it to explore new investment opportunities
At $142.47 per share, Guidewire Software trades at 7.8x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Nutanix (NTNX)
Net Cash Position: $331.1 million (3.1% of Market Cap)
Originally pioneering hyperconverged infrastructure to break down traditional data center silos, Nutanix (NASDAQ: NTNX) provides a unified software platform that enables organizations to run applications and manage data across private, public, and hybrid cloud environments.
Why Could NTNX Be a Winner?
- Software is difficult to replicate at scale and leads to a best-in-class gross margin of 87.1%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Nutanix is trading at $40.58 per share, or 3.9x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
