Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up.

Two Stocks to Sell:

Walmart (WMT)

Trailing 12-Month Free Cash Flow Margin: 2%

Known for its large-format Supercenters, Walmart (NYSE: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Why Does WMT Worry Us?

1. Sizable revenue base leads to growth challenges as its 5% annual revenue increases over the last six years fell short of other consumer retail companies
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 24.8% that must be offset through higher volumes
3. Performance over the past six years shows its incremental sales were much less profitable, as its earnings per share fell by 6.7% annually

Walmart is trading at $100.50 per share, or 36.7x forward P/E. To fully understand why you should be careful with WMT, check out our full research report (it’s free).

Vail Resorts (MTN)

Trailing 12-Month Free Cash Flow Margin: 13.4%

Founded by two Aspen, Colorado ski patrol guides, Vail Resorts (NYSE: MTN) is a mountain resort company offering luxury experiences in over 30 locations across the globe.

Why Are We Wary of MTN?

1. Lackluster 1.2% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Sluggish trends in its skier visits suggest customers aren’t adopting its solutions as quickly as the company hoped
3. Anticipated sales growth of 3.4% for the next year implies demand will be shaky

Vail Resorts’s stock price of $157.90 implies a valuation ratio of 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than MTN.

One Stock to Buy:

Robinhood (HOOD)

Trailing 12-Month Free Cash Flow Margin: 126%

With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.

Why Will HOOD Beat the Market?

1. Monetization efforts are paying off as its average revenue per user has grown by 40.9% annually over the last two years
2. Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 54.6% outpaced its revenue gains
3. Strong free cash flow margin of 67% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy

At $107.33 per share, Robinhood trades at 43.4x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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