Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges. However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.
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 is one stock under $50 that could 10x and two that may have trouble.
Two Stocks Under $50 to Sell:
Rush Street Interactive (RSI)
Share Price: $11.82
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Why Does RSI Fall Short?
- Estimated sales growth of 12.4% for the next 12 months implies demand will slow from its two-year trend
- Operating margin of 0.5% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Low free cash flow margin of 8.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Rush Street Interactive is trading at $11.82 per share, or 36.2x forward P/E. Read our free research report to see why you should think twice about including RSI in your portfolio.
Graphic Packaging Holding (GPK)
Share Price: $22.46
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Do We Think GPK Will Underperform?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Earnings per share have contracted by 5.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- 10.9 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Graphic Packaging Holding’s stock price of $22.46 implies a valuation ratio of 9x forward P/E. If you’re considering GPK for your portfolio, see our FREE research report to learn more.
One Stock Under $50 to Watch:
Grid Dynamics (GDYN)
Share Price: $13.50
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ:GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
Why Is GDYN on Our Radar?
- Market share has increased this cycle as its 24.4% annual revenue growth over the last five years was exceptional
- Market share is on track to rise over the next 12 months as its 14.8% projected revenue growth implies demand will accelerate from its two-year trend
- Rising returns on capital show management is making relatively better investments
At $13.50 per share, Grid Dynamics trades at 34.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.