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Unprofitable companies face headwinds as they struggle to keep operating expenses under control. Some may be investing heavily, but the majority fail to convert spending into sustainable growth.

A lack of profits can lead to trouble, but StockStory helps you identify the businesses that stand a chance of making it through. That said, here are three unprofitable companiesto steer clear of and a few better alternatives.

AMC Networks (AMCX)

Trailing 12-Month GAAP Operating Margin: -3.6%

Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ:AMCX) is a broadcaster producing a diverse range of television shows and movies.

Why Do We Pass on AMCX?

1. Annual sales declines of 4.6% for the past five years show its products and services struggled to connect with the market

2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 15.3% annually, worse than its revenue

3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

AMC Networks’s stock price of $6.30 implies a valuation ratio of 2.1x forward P/E. To fully understand why you should be careful with AMCX, check out our full research report (it’s free).

Fluence Energy (FLNC)

Trailing 12-Month GAAP Operating Margin: -1.1%

Pioneering the use of lithium-ion batteries for grid storage, Fluence (NASDAQ:FLNC) helps store renewable energy sources with battery systems.

Why Do We Think Twice About FLNC?

1. Historically negative EPS casts doubt for cautious investors and clouds its long-term earnings prospects

2. Investments to defend its competitive moat have ramped up over the last five years as its free cash flow margin decreased by 12 percentage points

3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $4.60 per share, Fluence Energy trades at 6.9x forward P/E. Read our free research report to see why you should think twice about including FLNC in your portfolio, it’s free.

Pediatrix Medical Group (MD)

Trailing 12-Month GAAP Operating Margin: -2.7%

With a network of approximately 2,620 affiliated physicians caring for some of the most vulnerable patients, Pediatrix Medical Group (NYSE:MD) provides specialized physician services focused on neonatal, maternal-fetal, pediatric cardiology and other pediatric subspecialty care across 37 states.

Why Is MD Risky?

1. Lagging comparable store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand

2. Earnings per share fell by 11.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned