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.

Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are three cash-producing companies to steer clear of and a few better alternatives.

Trailing 12-Month Free Cash Flow Margin: 5.1%

Delighting customers since its inception in 1951, Jack in the Box (NASDAQ:JACK) is a distinctive fast-food chain known for its bold flavors, innovative menu items, and quirky marketing.

Why Is JACK Risky?

Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience

Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 6.5 percentage points

High net-debt-to-EBITDA ratio of 11× increases the risk of forced asset sales or dilutive financing if operational performance weakens

Jack in the Box is trading at $22.06 per share, or 5.8x forward P/E. Check out our free in-depth research report to learn more about why JACK doesn’t pass our bar.

Trailing 12-Month Free Cash Flow Margin: 32.1%

Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.

Why Does JAZZ Give Us Pause?

Muted 4.7% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers

Revenue growth over the past five years was nullified by the company’s new share issuances as its earnings per share fell by 8.7% annually

High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $163.13 per share, Jazz Pharmaceuticals trades at 7.5x forward P/E. If you’re considering JAZZ for your portfolio, see our FREE research report to learn more.

Trailing 12-Month Free Cash Flow Margin: 15.1%

Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.

Why Are We Wary of ZBRA?

Sales trends were unexciting over the last two years as its 1.7% annual growth was below the typical business services company

Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth

Free cash flow margin shrank by 7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Zebra’s stock price of $238.84 implies a valuation ratio of 14.3x forward P/E. Read our free research report to see why you should think twice about including ZBRA in your portfolio, it’s free.

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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.