2 Unprofitable Stocks with Competitive Advantages and 1 Facing Headwinds

Barchart·06/02/2026 04:22:24

Unprofitable companies can burn through cash quickly, leaving investors exposed if they fail to turn things around. Without a clear path to profitability, these businesses risk running out of capital or relying on dilutive fundraising.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. Keeping that in mind, here are two unprofitable companies with the potential to become industry leaders and one that may never reach the Promised Land.

One Stock to Sell:

HA Sustainable Infrastructure Capital (HASI)

Trailing 12-Month GAAP Operating Margin: -9.1%

With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital (NYSE:HASI) is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.

Why Does HASI Give Us Pause?

1. Performance over the past two years shows its incremental sales were less profitable, as its 9.7% annual earnings per share growth trailed its revenue gains
2. Below-average return on equity indicates management struggled to find compelling investment opportunities

HA Sustainable Infrastructure Capital is trading at $40.06 per share, or 13.7x forward P/E. Read our free research report to see why you should think twice about including HASI in your portfolio.

Two Stocks to Watch:

Matrix Service (MTRX)

Trailing 12-Month GAAP Operating Margin: -1.4%

Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.

Why Are We Fans of MTRX?

1. Projected revenue growth of 12% for the next 12 months indicates demand will rise above its two-year trend
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 58.2% over the last two years outstripped its revenue performance
3. Free cash flow margin grew by 8 percentage points over the last five years, giving the company more chips to play with

Matrix Service’s stock price of $13.39 implies a valuation ratio of 19x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Hims & Hers Health (HIMS)

Trailing 12-Month GAAP Operating Margin: -1.3%

Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE:HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.

Why Are We Backing HIMS?

1. Average customer growth of 26.1% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future
2. Free cash flow margin jumped by 16.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Returns on capital are increasing as management’s prior bets are starting to bear fruit

At $27.73 per share, Hims & Hers Health trades at 20.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

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