The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here are three stocks under $50 to avoid and some other investments you should consider instead.
Appian (APPN)
Share Price: $29.51
Powering billions of transactions daily since its founding in 1999, Appian (NASDAQ: APPN) provides a low-code platform that helps businesses automate complex processes and operationalize artificial intelligence without extensive programming knowledge.
Why Does APPN Give Us Pause?
- Sales trends were unexciting over the last two years as its 13.9% annual growth was below the typical software company
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Low free cash flow margin of 7% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Appian’s stock price of $29.51 implies a valuation ratio of 3x forward price-to-sales. If you’re considering APPN for your portfolio, see our FREE research report to learn more.
Flywire (FLYW)
Share Price: $12.97
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ: FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Are We Cautious About FLYW?
- Gross margin of 62.9% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Customer acquisition costs take a while to recoup, making it difficult to justify sales and marketing investments that could increase revenue
- Operating margin improvement of 3.5 percentage points over the last year demonstrates its ability to scale efficiently
At $12.97 per share, Flywire trades at 2.5x forward price-to-sales. Check out our free in-depth research report to learn more about why FLYW doesn’t pass our bar.
Collegium Pharmaceutical (COLL)
Share Price: $35.65
Pioneering abuse-deterrent technology in a field plagued by addiction concerns, Collegium Pharmaceutical (NASDAQ: COLL) develops and markets specialty medications for treating moderate to severe pain, including abuse-deterrent opioid formulations.
Why Do We Think Twice About COLL?
- Smaller revenue base of $707 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Free cash flow margin shrank by 2.7 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Eroding returns on capital suggest its historical profit centers are aging
Collegium Pharmaceutical is trading at $35.65 per share, or 4.9x forward P/E. Dive into our free research report to see why there are better opportunities than COLL.
High-Quality Stocks for All Market Conditions
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