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 companiesto steer clear of and a few better alternatives.

Coursera (COUR)

Trailing 12-Month GAAP Operating Margin: -11.3%

Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Why Are We Hesitant About COUR?

1. Preference for prioritizing user growth over monetization has led to 6.4% annual drops in its average revenue per customer
2. Estimated sales growth of 5.6% for the next 12 months implies demand will slow from its three-year trend
3. High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum

Coursera is trading at $11.11 per share, or 34.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than COUR.

Plug Power (PLUG)

Trailing 12-Month GAAP Operating Margin: -278%

Powering forklifts for Walmart’s distribution centers, Plug Power (NASDAQ: PLUG) provides hydrogen fuel cells used to power electric motors.

Why Should You Sell PLUG?

1. Sales tumbled by 12.6% annually over the last two years, showing market trends are working against its favor during this cycle
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6,283 percentage points
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $1.57 per share, Plug Power trades at 2.2x forward price-to-sales. If you’re considering PLUG for your portfolio, see our FREE research report to learn more.

FuelCell Energy (FCEL)

Trailing 12-Month GAAP Operating Margin: -134%

Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.

Why Does FCEL Worry Us?

1. Muted 4.3% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

FuelCell Energy’s stock price of $6.57 implies a valuation ratio of 0.8x forward price-to-sales. Read our free research report to see why you should think twice about including FCEL in your portfolio.

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