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.
Asana (ASAN)
Share Price: $7.29
Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.
Why Should You Dump ASAN?
- ARR growth averaged a weak 9.6% over the last year, suggesting that competition is pulling some attention away from its software
- Platform has low switching costs as its net revenue retention rate of 96% demonstrates high turnover
- Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential
Asana’s stock price of $7.29 implies a valuation ratio of 2x forward price-to-sales. Check out our free in-depth research report to learn more about why ASAN doesn’t pass our bar.
Health Catalyst (HCAT)
Share Price: $2.13
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 Pass on HCAT?
- Customers had second thoughts about committing to its platform over the last year as its billings plateaued
- Sky-high servicing costs result in an inferior gross margin of 50.4% that must be offset through increased usage
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
At $2.13 per share, Health Catalyst trades at 0.6x forward price-to-sales. If you’re considering HCAT for your portfolio, see our FREE research report to learn more.
Hillman (HLMN)
Share Price: $8.13
Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ: HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.
Why Do We Think Twice About HLMN?
- Muted 2% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
- Poor free cash flow margin of 2.9% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Hillman is trading at $8.13 per share, or 13.3x forward P/E. Dive into our free research report to see why there are better opportunities than HLMN.
High-Quality Stocks for All Market Conditions
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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.
