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 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. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
Peloton (PTON)
Share Price: $4.62
Started as a Kickstarter campaign, Peloton (NASDAQ: PTON) is a fitness technology company known for its at-home exercise equipment and interactive online workout classes.
Why Do We Think PTON Will Underperform?
- Sluggish trends in its connected fitness subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Sales were less profitable over the last five years as its earnings per share fell by 31.7% annually, worse than its revenue declines
- Poor free cash flow margin of 9.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Peloton is trading at $4.62 per share, or 16.3x forward P/E. Check out our free in-depth research report to learn more about why PTON doesn’t pass our bar.
PlayStudios (MYPS)
Share Price: $0.57
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.
Why Do We Avoid MYPS?
- Annual sales declines of 1.2% for the past five years show its products and services struggled to connect with the market
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- Low free cash flow margin of 14.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
PlayStudios’s stock price of $0.57 implies a valuation ratio of 0.3x forward price-to-sales. Read our free research report to see why you should think twice about including MYPS in your portfolio.
Tilly's (TLYS)
Share Price: $1.45
With an emphasis on skate and surf culture, Tilly’s (NYSE: TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.
Why Are We Out on TLYS?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Cash-burning history makes us doubt the long-term viability of its business model
- Unprofitable operations could lead to additional rounds of dilutive equity financing if the credit window closes
At $1.45 per share, Tilly's trades at 0.1x forward price-to-sales. If you’re considering TLYS for your portfolio, see our FREE research report to learn more.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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.
