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 pass on and some alternatives you should look into instead.
Chegg (CHGG)
Share Price: $0.72
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Why Is CHGG Risky?
- Intense competition is diverting traffic from its platform as its services subscribers fell by 27% annually
- Inability to adjust its cost structure while its revenue declined over the last few years led to a 13.5 percentage point drop in the company’s EBITDA margin
- Earnings per share have contracted by 26% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Chegg is trading at $0.72 per share, or 2.8x forward EV/EBITDA. Check out our free in-depth research report to learn more about why CHGG doesn’t pass our bar.
Bloomin' Brands (BLMN)
Share Price: $8.72
Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ:BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Why Are We Out on BLMN?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
At $8.72 per share, Bloomin' Brands trades at 9.9x forward P/E. If you’re considering BLMN for your portfolio, see our FREE research report to learn more.
Coty (COTY)
Share Price: $2.66
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Do We Steer Clear of COTY?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Forecasted revenue decline of 1.2% for the upcoming 12 months implies demand will fall off a cliff
- Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 26.6% annually
Coty’s stock price of $2.66 implies a valuation ratio of 8.4x forward P/E. To fully understand why you should be careful with COTY, check out our full research report (it’s free).
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.