Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges. However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.
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 $50 to avoid and some other investments you should consider instead.
CarMax (KMX)
Share Price: $42.24
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE: KMX) is the largest automotive retailer in the United States.
Why Do We Think KMX Will Underperform?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Gross margin of 6% is an output of its commoditized inventory
- 18× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
CarMax’s stock price of $42.24 implies a valuation ratio of 16.4x forward P/E. Dive into our free research report to see why there are better opportunities than KMX.
Array (AD)
Share Price: $48.59
Operating as a majority-owned subsidiary of Telephone and Data Systems since its founding in 1983, Array (NYSE: AD) is a regional wireless telecommunications provider serving 4.6 million customers across 21 states with mobile phone, internet, and IoT services.
Why Do We Pass on AD?
- Sales tumbled by 13.9% annually over the last five years, showing market trends are working against its favor during this cycle
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 26.8% annually, worse than its revenue
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Array is trading at $48.59 per share, or 25.9x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why AD doesn’t pass our bar.
NBT Bancorp (NBTB)
Share Price: $43.70
Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ: NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.
Why Does NBTB Give Us Pause?
- Annual revenue growth of 8.5% over the last five years was below our standards for the banking sector
- Net interest income trends were unexciting over the last five years as its 9.4% annual growth was below the typical banking firm
- Performance over the past five years shows its incremental sales were less profitable, as its 4.3% annual earnings per share growth trailed its revenue gains
At $43.70 per share, NBT Bancorp trades at 1.1x forward P/B. Read our free research report to see why you should think twice about including NBTB in your portfolio.
High-Quality Stocks for All Market Conditions
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
