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.
These dynamics can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Revolve (RVLV)
Share Price: $20.44
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ: RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Why Do We Pass on RVLV?
- May need to improve its platform and marketing strategy as its 7.4% average growth in active customers underwhelmed
- Concerning trends in both user engagement and monetization suggest its platform’s efficacy is declining as its average revenue per buyer fell by 4% annually
- Incremental sales over the last three years were much less profitable as its earnings per share fell by 18.5% annually while its revenue grew
Revolve is trading at $20.44 per share, or 19.2x forward EV/EBITDA. Check out our free in-depth research report to learn more about why RVLV doesn’t pass our bar.
Grocery Outlet (GO)
Share Price: $13.77
Due to its differentiated procurement and buying approach, Grocery Outlet (NASDAQ: GO) is a discount grocery store chain that offers substantial discounts on name-brand products.
Why Does GO Fall Short?
- Subpar operating margin of 1.8% has withered over the last year, constraining its ability to invest in process improvements or effectively respond to new competitive threats
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
At $13.77 per share, Grocery Outlet trades at 17x forward P/E. If you’re considering GO for your portfolio, see our FREE research report to learn more.
Surgery Partners (SGRY)
Share Price: $19.45
With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ: SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.
Why Is SGRY Not Exciting?
- Underwhelming unit sales over the past two years imply it may need to invest in improvements to get back on track
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6 percentage points
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate
Surgery Partners’s stock price of $19.45 implies a valuation ratio of 17.7x forward P/E. Check out our free in-depth research report to learn more about why SGRY doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. 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-small-cap company Comfort Systems (+782% 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
