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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.
Udemy (UDMY)
Share Price: $5.75
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Why Does UDMY Fall Short?
- Preference for prioritizing user growth over monetization has led to 1.7% annual drops in its average revenue per buyer
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
- Highly competitive market means it’s on the never-ending treadmill of sales and marketing spend
At $5.75 per share, Udemy trades at 9.4x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than UDMY.
Redwire (RDW)
Share Price: $7.90
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Why Do We Avoid RDW?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 27.3 percentage points
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Redwire is trading at $7.90 per share, or 14.7x forward EV-to-EBITDA. If you’re considering RDW for your portfolio, see our FREE research report to learn more.
Tilray (TLRY)
Share Price: $1.36
Founded in 2013, Tilray Brands (NASDAQ: TLRY) engages in cannabis research, cultivation, and distribution, offering a range of medical and recreational cannabis products, hemp-based foods, and alcoholic beverages.
Why Should You Dump TLRY?
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 248.3 percentage points
- Increased cash burn over the last year raises questions about the return timeline for its investments
- Negative returns on capital show management lost money while trying to expand the business, and its decreasing returns suggest its historical profit centers are aging
Tilray’s stock price of $1.36 implies a valuation ratio of 21.5x forward EV-to-EBITDA. To fully understand why you should be careful with TLRY, check out our full research report (it’s free for active Edge members).
Stocks We Like More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 6 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-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
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