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 swipe left on and some alternatives you should look into instead.
Designer Brands (DBI)
Share Price: $3.86
Founded in 1969 as a shoe importer and distributor, Designer Brands (NYSE: DBI) is an American discount retailer focused on footwear and accessories.
Why Do We Avoid DBI?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
- 11× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Designer Brands’s stock price of $3.86 implies a valuation ratio of 15.1x forward P/E. Read our free research report to see why you should think twice about including DBI in your portfolio.
Topgolf Callaway (MODG)
Share Price: $9.37
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE: MODG) sells golf equipment and operates technology-driven golf entertainment venues.
Why Do We Steer Clear of MODG?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 39.2% annually
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Topgolf Callaway is trading at $9.37 per share, or 3.8x forward EV-to-EBITDA. If you’re considering MODG for your portfolio, see our FREE research report to learn more.
Latham (SWIM)
Share Price: $7.90
Started as a family business, Latham (NASDAQ: SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.
Why Is SWIM Not Exciting?
- Products and services have few die-hard fans as sales have declined by 7.7% annually over the last two years
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.7 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively
At $7.90 per share, Latham trades at 55.7x forward P/E. To fully understand why you should be careful with SWIM, check out our full research report (it’s free).
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% 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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