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.

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. That said, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.

Bumble (BMBL)

Share Price: $4.96

Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.

Why Does BMBL Fall Short?

1. Decision to emphasize platform growth over monetization has contributed to 3.9% annual declines in its average revenue per buyer
2. Forecasted revenue decline of 8.3% for the upcoming 12 months implies demand will fall off a cliff
3. Annual earnings per share growth of 3.6% underperformed its revenue over the last three years, partly because it diluted shareholders

Bumble’s stock price of $4.96 implies a valuation ratio of 4.3x forward EV-to-EBITDA. To fully understand why you should be careful with BMBL, check out our full research report (it’s free).

LegalZoom (LZ)

Share Price: $9.27

Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.

Why Are We Cautious About LZ?

1. Sales trends were unexciting over the last three years as its 5.8% annual growth was below the typical consumer internet company
2. Focus on expanding its platform has led to weaker growth in its average revenue per user
3. Projected sales growth of 4.9% for the next 12 months suggests sluggish demand

LegalZoom is trading at $9.27 per share, or 10.5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why LZ doesn’t pass our bar.

Sabre (SABR)

Share Price: $3.16

Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.

Why Do We Avoid SABR?

1. Number of total bookings has disappointed over the past two years, indicating weak demand for its offerings
2. Poor free cash flow margin of -0.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $3.16 per share, Sabre trades at 17.4x forward price-to-earnings. If you’re considering SABR for your portfolio, see our FREE research report to learn more.

Stocks We Like More

The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.