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 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 avoid and some other investments you should consider instead.
ThredUp (TDUP)
Share Price: $4.64
Founded to revolutionize thrifting, ThredUp (NASDAQ: TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
Why Should You Dump TDUP?
- Demand for its offerings was relatively low as its number of orders has underwhelmed
- Persistent operating margin losses suggest the business manages its expenses poorly
- Cash-burning history makes us doubt the long-term viability of its business model
ThredUp is trading at $4.64 per share, or 37.1x forward EV-to-EBITDA. To fully understand why you should be careful with TDUP, check out our full research report (it’s free).
Beyond Meat (BYND)
Share Price: $0.73
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ: BYND) is a food company specializing in alternatives to traditional meat products.
Why Do We Steer Clear of BYND?
- Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 16.7 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Beyond Meat’s stock price of $0.73 implies a valuation ratio of 0.2x forward price-to-sales. Check out our free in-depth research report to learn more about why BYND doesn’t pass our bar.
Vestis (VSTS)
Share Price: $8.01
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE: VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Why Do We Avoid VSTS?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.7% annually over the last two years
- Earnings per share have contracted by 32.7% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $8.01 per share, Vestis trades at 18.5x forward P/E. Read our free research report to see why you should think twice about including VSTS in your portfolio.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
