Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. That said, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.
Bumble (BMBL)
Share Price: $4.96
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Why Does BMBL Fall Short?
-
Decision to emphasize platform growth over monetization has contributed to 3.9% annual declines in its average revenue per buyer
-
Forecasted revenue decline of 8.3% for the upcoming 12 months implies demand will fall off a cliff
-
Annual earnings per share growth of 3.6% underperformed its revenue over the last three years, partly because it diluted shareholders
Bumble’s stock price of $4.96 implies a valuation ratio of 4.3x forward EV-to-EBITDA. If you’re considering BMBL for your portfolio, see our FREE research report to learn more .
LegalZoom (LZ)
Share Price: $9.27
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ:LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Are We Cautious About LZ?
-
Sales trends were unexciting over the last three years as its 5.8% annual growth was below the typical consumer internet company
-
Focus on expanding its platform has led to weaker growth in its average revenue per user
-
Projected sales growth of 4.9% for the next 12 months suggests sluggish demand
LegalZoom is trading at $9.27 per share, or 10.5x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including LZ in your portfolio, it’s free .
Sabre (SABR)
Share Price: $3.16
Originally a division of American Airlines, Sabre (NASDAQ:SABR) is a technology provider for the global travel and tourism industry.
Why Do We Avoid SABR?
-
Number of total bookings has disappointed over the past two years, indicating weak demand for its offerings
-
Poor free cash flow margin of -0.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
-
Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $3.16 per share, Sabre trades at 17.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than SABR .
Stocks We Like More
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks . This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free .
