3 Stocks Under $10 We’re Skeptical Of
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.
Health Catalyst (HCAT)
Share Price: $2.45
Built on its "Health Catalyst Flywheel" methodology that emphasizes measurable outcomes, Health Catalyst (NASDAQ:HCAT) provides data and analytics technology and services that help healthcare organizations manage their data and drive measurable clinical, financial, and operational improvements.
Why Do We Steer Clear of HCAT?
- Annual revenue growth of 4.4% over the last two years was well below our standards for the software sector
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Negative free cash flow raises questions about the return timeline for its investments
At $2.45 per share, Health Catalyst trades at 0.6x forward price-to-sales. To fully understand why you should be careful with HCAT, check out our full research report (it’s free for active Edge members).
Leslie's (LESL)
Share Price: $1.71
Named after founder Philip Leslie, who established the company in 1963, Leslie’s (NASDAQ:LESL) is a retailer that sells pool and spa supplies, equipment, and maintenance services.
Why Should You Dump LESL?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Sales were less profitable over the last three years as its earnings per share fell by 31.6% annually, worse than its revenue declines
- High net-debt-to-EBITDA ratio of 15× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Leslie’s stock price of $1.71 implies a valuation ratio of 14.4x forward EV-to-EBITDA. If you’re considering LESL for your portfolio, see our FREE research report to learn more.
Funko (FNKO)
Share Price: $3.37
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ:FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Why Should You Sell FNKO?
- Sales trends were unexciting over the last five years as its 7.7% annual growth was below the typical consumer discretionary company
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Funko is trading at $3.37 per share, or 5x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why FNKO doesn’t pass our bar.
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 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-micro-cap company Tecnoglass (+1,754% 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.