Cash-generating companies often have the flexibility to invest, return capital to shareholders, or navigate downturns. The best of these businesses not only accumulate cash but deploy it strategically for growth.
Even among businesses with healthy cash flow, only a select few maximize its potential, and we’re here to pinpoint them. That said, here are three cash-producing companies that leverage their financial strength to beat the competition.
Toast (TOST)
Trailing 12-Month Free Cash Flow Margin: 9.9%
Born from the frustrations of three friends waiting too long for their restaurant bill, Toast (NYSE: TOST) provides a cloud-based digital technology platform with software, payment processing, and hardware solutions built specifically for restaurants.
Why Could TOST Be a Winner?
- Customers view its software as mission-critical to their operations as its ARR has averaged 29.4% growth over the last year
- Forecasted revenue growth of 20.5% for the next 12 months indicates its momentum over the last two years is sustainable
At $28.31 per share, Toast trades at 2.4x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Lululemon (LULU)
Trailing 12-Month Free Cash Flow Margin: 10.2%
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Will LULU Beat the Market?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.8% over the past two years
- Differentiated product assortment results in a best-in-class gross margin of 58.6%
- Robust free cash flow margin of 12.8% gives it many options for capital deployment
Lululemon’s stock price of $162.25 implies a valuation ratio of 13.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Planet Labs (PL)
Trailing 12-Month Free Cash Flow Margin: 14.4%
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
Why Do We Love PL?
- Average backlog growth of 177% over the past two years shows it has a steady sales pipeline that will drive future orders
- Free cash flow turned positive over the last five years, indicating the company has passed a significant test
- Rising returns on capital show the company is starting to reap the benefits of its past investments
Planet Labs is trading at $25.20 per share, or 842.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
