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. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.

Snap (SNAP)

Share Price: $9.76

Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.

Why Does SNAP Give Us Pause?

1. Focus on expanding its platform has led to weaker growth in its average revenue per user
2. Costs have risen faster than its revenue over the last few years, causing its EBITDA margin to decline by 5.2 percentage points
3. Earnings per share fell by 10.2% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable

Snap is trading at $9.76 per share, or 25.5x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than SNAP.

Denny's (DENN)

Share Price: $4.24

Open around the clock, Denny’s (NASDAQ: DENN) is a chain of diner restaurants serving breakfast and traditional American fare.

Why Is DENN Risky?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Free cash flow margin dropped by 9 percentage points over the last year, implying the company became more capital intensive as competition picked up
3. High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Denny’s stock price of $4.24 implies a valuation ratio of 8x forward P/E. Check out our free in-depth research report to learn more about why DENN doesn’t pass our bar.

The Real Brokerage (REAX)

Share Price: $4.14

Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ: REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.

Why Should You Sell REAX?

1. Historical operating margin losses point to an inefficient cost structure
2. Earnings per share fell by 9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Low free cash flow margin of 3.3% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $4.14 per share, The Real Brokerage trades at 15.9x forward EV-to-EBITDA. If you’re considering REAX for your portfolio, see our FREE research report to learn more.

Stocks We Like More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.