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.
These dynamic can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one stock under $50 with massive upside potential and two that may have trouble.
Two Stocks Under $50 to Sell:
Match Group (MTCH)
Share Price: $31.20
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Why Are We Wary of MTCH?
- Intense competition is diverting traffic from its platform as its payers fell by 4.5% annually
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
- 2.6 percentage point decline in its free cash flow margin over the last few years reflects the company’s increased investments to defend its market position
Match Group’s stock price of $31.20 implies a valuation ratio of 6.7x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than MTCH.
Telephone and Data Systems (TDS)
Share Price: $38.74
Operating primarily through its majority-owned subsidiary UScellular and wholly-owned TDS Telecom, Telephone and Data Systems (NYSE: TDS) provides wireless, broadband, video, and voice communications services to 4.6 million wireless and 1.2 million broadband customers across the United States.
Why Should You Sell TDS?
- Sales tumbled by 1.3% annually over the last four years, showing market trends are working against its favor during this cycle
- Earnings per share have dipped by 30.7% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- 23× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $38.74 per share, Telephone and Data Systems trades at 3.3x forward EV-to-EBITDA. If you’re considering TDS for your portfolio, see our FREE research report to learn more.
One Stock Under $50 to Buy:
Verra Mobility (VRRM)
Share Price: $22.90
Managing over 165 million tolling transactions per year, Verra Mobility (NYSE: VRRM) is a leading provider of smart mobility technology that enhances safety, efficiency, and convenience on roadways.
Why Should You Buy VRRM?
- Annual revenue growth of 14.4% over the past five years was outstanding, reflecting market share gains this cycle
- Offerings are mission-critical for businesses and result in a best-in-class gross margin of 62.3%
- Strong free cash flow margin of 19.6% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
Verra Mobility is trading at $22.90 per share, or 17.2x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.
