Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here are three companies with net cash positions that don’t make the cut and some better choices instead.
ON24 (ONTF)
Net Cash Position: $173.8 million (51.6% of Market Cap)
Powering over 1,700 companies' virtual marketing efforts since 1998, ON24 (NYSE: ONTF) provides a cloud-based platform that enables businesses to create interactive digital experiences and capture actionable data from customer engagement.
Why Do We Think ONTF Will Underperform?
- Customers had second thoughts about committing to its platform over the last year as its billings averaged 8.1% declines
- Forecasted revenue decline of 5.1% for the upcoming 12 months implies demand will fall even further
- Suboptimal cost structure is highlighted by its history of operating margin losses
At $7.97 per share, ON24 trades at 2.5x forward price-to-sales. To fully understand why you should be careful with ONTF, check out our full research report (it’s free for active Edge members).
Chegg (CHGG)
Net Cash Position: $18.48 million (17.2% of Market Cap)
Started as a physical textbook rental service, Chegg (NYSE: CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Why Do We Steer Clear of CHGG?
- Services Subscribers have declined by 18.9% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
- EBITDA margin declined by 13 percentage points over the last few years as its sales cratered
- Sales were less profitable over the last three years as its earnings per share fell by 45.3% annually, worse than its revenue declines
Chegg’s stock price of $0.99 implies a valuation ratio of 2.4x forward EV/EBITDA. Read our free research report to see why you should think twice about including CHGG in your portfolio.
M&T Bank (MTB)
Net Cash Position: $1.18 billion (3.7% of Market Cap)
Tracing its roots back to 1856 when it was founded as Manufacturers and Traders Bank in Buffalo, New York, M&T Bank (NYSE: MTB) is a regional bank holding company that provides retail and commercial banking, trust, wealth management, and investment services to consumers and businesses.
Why Does MTB Give Us Pause?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Net interest margin dropped by 26 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Earnings per share fell by 1.4% annually over the last two years while its revenue was flat, showing each sale was less profitable
M&T Bank is trading at $200.00 per share, or 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than MTB.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-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.
