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.
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.
ThredUp (TDUP)
Share Price: $6.27
Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Should You Dump TDUP?
- Number of orders has disappointed over the past two years, indicating weak demand for its offerings
- Historical operating losses point to an inefficient cost structure
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
ThredUp’s stock price of $6.27 implies a valuation ratio of 84.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including TDUP in your portfolio.
Global Business Travel (GBTG)
Share Price: $5.83
Holding close ties to American Express, Global Business Travel (NYSE: GBTG) is a comprehensive travel and expense management services provider to corporations worldwide.
Why Are We Cautious About GBTG?
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
- High servicing costs result in a relatively inferior gross margin of 60.8% that must be offset through increased usage
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Global Business Travel is trading at $5.83 per share, or 1.1x forward price-to-sales. To fully understand why you should be careful with GBTG, check out our full research report (it’s free).
FTAI Infrastructure (FIP)
Share Price: $4.60
Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ: FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.
Why Are We Hesitant About FIP?
- Suboptimal cost structure is highlighted by its history of operating losses
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 4.8% annually
- Cash burn makes us question whether it can achieve sustainable long-term growth
At $4.60 per share, FTAI Infrastructure trades at 2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than FIP.
Stocks We Like More
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 Growth Stocks for this month. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
