The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Olo (OLO)
Share Price: $10.21
Founded by Noah Glass, who wanted to get a cup of coffee faster on his way to work, Olo (NYSE: OLO) provides restaurants and food retailers with software to manage food orders and delivery.
Why Does OLO Worry Us?
- Gross margin of 53.3% is way below its competitors, leaving less money to invest in areas like marketing and R&D
- Suboptimal cost structure is highlighted by its history of operating margin losses
Olo is trading at $10.21 per share, or 5x forward price-to-sales. If you’re considering OLO for your portfolio, see our FREE research report to learn more.
BlackLine (BL)
Share Price: $48.20
Started in 2001 by software engineer Therese Tucker, one of the very few women founders who took their companies public, BlackLine (NASDAQ: BL) provides software for organizations to automate accounting and finance tasks.
Why Are We Hesitant About BL?
- 12.5% annual revenue growth over the last three years was slower than its software peers
- Offerings struggled to generate meaningful interest as its average billings growth of 7.2% over the last year did not impress
- Estimated sales growth of 8.2% for the next 12 months implies demand will slow from its three-year trend
BlackLine’s stock price of $48.20 implies a valuation ratio of 4.2x forward price-to-sales. Read our free research report to see why you should think twice about including BL in your portfolio.
Amplitude (AMPL)
Share Price: $11.20
Born out of a failed voice recognition startup by founder Spenser Skates, Amplitude (NASDAQ: AMPL) is data analytics software helping companies improve and optimize their digital products.
Why Is AMPL Not Exciting?
- Products, pricing, or go-to-market strategy may need some adjustments as its 9.9% average billings growth over the last year was weak
- Struggled to drive increased usage of its software, demonstrated by its subpar 100% net revenue retention rate
- Historical operating margin losses point to an inefficient cost structure
At $11.20 per share, Amplitude trades at 4.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than AMPL.
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