Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
DigitalOcean (DOCN)
Share Price: $30.29
Built for simplicity in a world of complex cloud solutions, DigitalOcean (NYSE: DOCN) provides a simplified cloud computing platform that enables developers and small businesses to quickly deploy and scale applications.
Why Does DOCN Give Us Pause?
- Revenue increased by 19.2% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Platform has low switching costs as its net revenue retention rate of 98.8% demonstrates high turnover
- Gross margin of 59.7% reflects its high servicing costs
At $30.29 per share, DigitalOcean trades at 3.2x forward price-to-sales. To fully understand why you should be careful with DOCN, check out our full research report (it’s free).
Sleep Number (SNBR)
Share Price: $10.67
Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ: SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
Why Is SNBR Risky?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Sales are projected to tank by 5.6% over the next 12 months as demand evaporates further
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Sleep Number’s stock price of $10.67 implies a valuation ratio of 2.2x forward EV-to-EBITDA. If you’re considering SNBR for your portfolio, see our FREE research report to learn more.
Perdoceo Education (PRDO)
Share Price: $32.34
Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ: PRDO) is an educational services company that specializes in postsecondary education.
Why Does PRDO Fall Short?
- Lackluster 2.9% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Eroding returns on capital suggest its historical profit centers are aging
Perdoceo Education is trading at $32.34 per share, or 20.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including PRDO in your portfolio.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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