A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here are two cash-producing companies that excel at turning cash into shareholder value and one best left off your watchlist.
One Stock to Sell:
Rapid7 (RPD)
Trailing 12-Month Free Cash Flow Margin: 18.2%
With its name inspired by the need for quick responses to cyber threats, Rapid7 (NASDAQ: RPD) provides cybersecurity software and services that help organizations detect vulnerabilities, monitor threats, and respond to security incidents.
Why Are We Out on RPD?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 3% underwhelmed
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Efficiency has decreased over the last year as its operating margin fell by 2.6 percentage points
Rapid7’s stock price of $14.05 implies a valuation ratio of 1.1x forward price-to-sales. Read our free research report to see why you should think twice about including RPD in your portfolio.
Two Stocks to Watch:
Ibotta (IBTA)
Trailing 12-Month Free Cash Flow Margin: 18.1%
Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE: IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.
Why Does IBTA Stand Out?
- Rapid growth in total redemptions demonstrates strong market adoption
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 292% annually, topping its revenue gains
- Free cash flow margin jumped by 48.6 percentage points over the last four years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $23.40 per share, Ibotta trades at 18.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
WisdomTree (WT)
Trailing 12-Month Free Cash Flow Margin: 28%
Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE: WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.
Why Are We Bullish on WT?
- Market share has increased this cycle as its 17.4% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 57.1% over the last two years outstripped its revenue performance
- ROE punches in at 14.3%, illustrating management’s expertise in identifying profitable investments
WisdomTree is trading at $13.15 per share, or 13.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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 Kadant (+351% 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.
