Stocks under $10 pique our interest because they have room to grow (as well as the most affordable option contract premiums). That doesn’t mean they’re bargains though, and we urge investors to be careful as many have risky business models.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
Heartland Express (HTLD)
Share Price: $9.12
Founded by the son of a trucker, Heartland Express (NASDAQ: HTLD) offers full-truckload deliveries across the United States and Mexico.
Why Do We Steer Clear of HTLD?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.8% annually over the last two years
- 10.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Heartland Express is trading at $9.12 per share, or 4.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why HTLD doesn’t pass our bar.
Tilray (TLRY)
Share Price: $0.45
Founded in 2013, Tilray Brands (NASDAQ: TLRY) engages in cannabis research, cultivation, and distribution, offering a range of medical and recreational cannabis products, hemp-based foods, and alcoholic beverages.
Why Should You Dump TLRY?
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 70.1 percentage points
- Cash burn has widened over the last year, making us question whether it can reliably generate shareholder value
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
At $0.45 per share, Tilray trades at 5.7x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including TLRY in your portfolio.
Fastly (FSLY)
Share Price: $8.17
Founded in 2011, Fastly (NYSE: FSLY) provides content delivery and edge cloud computing services, enabling enterprises and developers to deliver fast, secure, and scalable digital content and experiences.
Why Do We Pass on FSLY?
- 14.3% annual revenue growth over the last three years was slower than its software peers
- Gross margin of 54% reflects its high servicing costs
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Fastly’s stock price of $8.17 implies a valuation ratio of 2x forward price-to-sales. If you’re considering FSLY for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 176% over the last five years.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
