Three Cash-Burning Stocks to Avoid: Avis Budget Group, Resideo, and Applied Digital

Avis Budget Group (CAR), Resideo (REZI), and Applied Digital (APLD) are three cash-burning companies with high risks. CAR's sales have declined by 1.5% annually over the last two years, and its diminishing returns on capital suggest its earlier profit pools are drying up. REZI's free cash flow margin has shrunk by 21.1 percentage points over the last five years, and its eroding returns on capital indicate its historical profit centers are aging. APLD's flat earnings per share over the last three years underperformed the sector average, and its free cash flow margin has shrunk by 79.8 percentage points over the last five years. These companies risk dilution, mounting debt, or even bankruptcy without a clear path to profitability.