Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts. But that doesn’t mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals.
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. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
Opendoor (OPEN)
Share Price: $3.84
Founded by real estate guru Eric Wu, Opendoor (NASDAQ: OPEN) offers a technology-driven, convenient, and streamlined process to buy and sell homes.
Why Do We Avoid OPEN?
- Number of homes sold has disappointed over the past two years, indicating weak demand for its offerings
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3.9% for the last two years
- EBITDA losses may force it to accept punitive lending terms or high-cost debt
At $3.84 per share, Opendoor trades at 118.6x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than OPEN.
Xerox (XRX)
Share Price: $3.45
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Why Do We Pass on XRX?
- Annual revenue growth of 1.5% over the last five years was below our standards for the business services sector
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 50.9% annually while its revenue grew
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Xerox’s stock price of $3.45 implies a valuation ratio of 0x forward price-to-sales. Check out our free in-depth research report to learn more about why XRX doesn’t pass our bar.
Ridgepost Capital (RPC)
Share Price: $8.56
Operating as a bridge between institutional investors and hard-to-access private market opportunities, Ridgepost Capital (NYSE: RPC) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.
Why Are We Wary of RPC?
- Performance over the past two years shows its incremental sales were less profitable, as its 6.3% annual earnings per share growth trailed its revenue gains
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Ridgepost Capital is trading at $8.56 per share, or 7.9x forward P/E. Dive into our free research report to see why there are better opportunities than RPC.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
