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.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
8x8 (EGHT)
Share Price: $2.06
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
Why Do We Pass on EGHT?
- Customers had second thoughts about committing to its platform over the last year as its billings plateaued
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
8x8 is trading at $2.06 per share, or 0.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than EGHT.
Janus (JBI)
Share Price: $6.37
Standing out with its digital keyless entry into self-storage room technology, Janus (NYSE: JBI) is a provider of easily accessible self-storage solutions.
Why Are We Cautious About JBI?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Forecasted revenue decline of 1.2% for the upcoming 12 months implies demand will fall even further
- Earnings per share have dipped by 21.6% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $6.37 per share, Janus trades at 9.6x forward P/E. Read our free research report to see why you should think twice about including JBI in your portfolio.
PacBio (PACB)
Share Price: $2.44
Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ: PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness.
Why Do We Think PACB Will Underperform?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.5% annually over the last two years
- Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
PacBio’s stock price of $2.44 implies a valuation ratio of 4.1x forward price-to-sales. Check out our free in-depth research report to learn more about why PACB doesn’t pass our bar.
Stocks We Like More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% 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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