Stocks in the $10-50 range offer a sweet spot between affordability and stability as they’re typically more established than penny stocks. But their headline prices don’t guarantee quality, and investors should exercise caution as some have shaky 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 $50 to avoid and some other investments you should consider instead.
DigitalOcean (DOCN)
Share Price: $41.45
Built for simplicity in a world of complex cloud solutions, DigitalOcean (NYSE: DOCN) provides a simplified cloud computing platform that enables developers and small businesses to quickly deploy and scale applications.
Why Is DOCN Not Exciting?
- ARR growth averaged a weak 13.3% over the last year, suggesting that competition is pulling some attention away from its software
- Competitive market dynamics make it difficult to retain customers, leading to a weak 98.8% net revenue retention rate
- Sky-high servicing costs result in an inferior gross margin of 59.7% that must be offset through increased usage
DigitalOcean’s stock price of $41.45 implies a valuation ratio of 4.4x forward price-to-sales. To fully understand why you should be careful with DOCN, check out our full research report (it’s free for active Edge members).
Allient (ALNT)
Share Price: $49.35
Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.
Why Are We Wary of ALNT?
- Annual sales declines of 3.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Issuance of new shares over the last two years caused its earnings per share to fall by 12.6% annually, even worse than its revenue declines
- ROIC of 8% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
At $49.35 per share, Allient trades at 23.8x forward P/E. If you’re considering ALNT for your portfolio, see our FREE research report to learn more.
Lazard (LAZ)
Share Price: $48.63
Tracing its roots back to 1848 when it began as a dry goods merchant in New Orleans, Lazard (NYSE: LAZ) is a global financial advisory and asset management firm that provides strategic advice to corporations, governments, institutions, and wealthy individuals.
Why Does LAZ Worry Us?
- Sales trends were unexciting over the last five years as its 3.6% annual growth was below the typical financials company
- Earnings per share fell by 2.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Lazard is trading at $48.63 per share, or 16x forward P/E. Check out our free in-depth research report to learn more about why LAZ doesn’t pass our bar.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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 Kadant (+351% 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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