Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.

Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here are three companies with net cash positions that don’t make the cut and some better choices instead.

Net Cash Position: $104.5 million (4.9% of Market Cap)

Founded by a former CEO and Harvard-educated entrepreneur Scott Keeneyn, nLIGHT (NASDAQ:LASR) offers semiconductor and fiber lasers to the industrial, aerospace & defense, and medical sectors.

Why Do We Pass on LASR?

Annual revenue growth of 2.6% over the last five years was below our standards for the industrials sector

Long-term business health is up for debate as its cash burn has increased over the last five years

Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $41.97 per share, nLIGHT trades at 146.6x forward P/E. If you’re considering LASR for your portfolio, see our FREE research report to learn more.

Net Cash Position: $25.2 million (20.8% of Market Cap)

With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE:ZVIA) is a better-for-you beverage company.

Why Does ZVIA Fall Short?

Sales stagnated over the last three years and signal the need for new growth strategies

Modest revenue base of $162.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies

Poor expense management has led to operating margin losses

Zevia is trading at $1.86 per share, or 177.7x forward EV-to-EBITDA. To fully understand why you should be careful with ZVIA, check out our full research report (it’s free).

Net Cash Position: $537.8 million (24.7% of Market Cap)

Founded in 1890 in Walla Walla, Washington, and evolving through more than a century of economic cycles, Banner Corporation (NASDAQ:BANR) operates Banner Bank, providing commercial banking services, loans, and financial products to individuals and businesses across Washington, Oregon, California, Idaho, and Utah.

Why Do We Think Twice About BANR?

Annual net interest income growth of 3.7% over the last five years was below our standards for the banking sector

Sales over the last two years were less profitable as its earnings per share fell by 6.1% annually while its revenue was flat

Estimated tangible book value per share growth of 9.4% for the next 12 months implies profitability will slow from its two-year trend

Banner Bank’s stock price of $63.91 implies a valuation ratio of 1.1x forward P/B. Check out our free in-depth research report to learn more about why BANR doesn’t pass our bar.

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