Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky business models.
This is precisely where StockStory comes in – we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Share Price: $23.77
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
Why Does AI Worry Us?
16.4% annual revenue growth over the last three years was slower than its software peers
Gross margin of 59.9% is way below its competitors, leaving less money to invest in areas like marketing and R&D
Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
C3.ai is trading at $23.77 per share, or 7.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than AI.
Share Price: $12.68
Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.
Why Does PATH Give Us Pause?
Products, pricing, or go-to-market strategy may need some adjustments as its 5.7% average billings growth over the last year was weak
Estimated sales growth of 6.4% for the next 12 months implies demand will slow from its three-year trend
Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
At $12.68 per share, UiPath trades at 4.7x forward price-to-sales. If you’re considering PATH for your portfolio, see our FREE research report to learn more.
Share Price: $17.35
With its watches displayed in 20 museums around the world, Movado (NYSE:MOV) is a watchmaking company with a portfolio of watch brands and accessories.
Why Is MOV Risky?
Annual sales declines of 1.4% for the past five years show its products and services struggled to connect with the market
Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
Waning returns on capital imply its previous profit engines are losing steam
Movado’s stock price of $17.35 implies a valuation ratio of 0.6x forward price-to-sales. Read our free research report to see why you should think twice about including MOV in your portfolio, it’s free.
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