3 Stocks Under $50 We Think Twice About

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.

These dynamics 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 are three stocks under $50 to avoid and some other investments you should consider instead.

Sprout Social (SPT)

Share Price: $17.35

Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ:SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.

Why Are We Hesitant About SPT?

1. Track record of operating margin losses stem from its decision to pursue growth instead of profits
2. Low free cash flow margin of 7.2% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $17.35 per share, Sprout Social trades at 2.1x forward price-to-sales. Check out our free in-depth research report to learn more about why SPT doesn’t pass our bar.

Caesars Entertainment (CZR)

Share Price: $26.63

Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ:CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.

Why Are We Wary of CZR?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 10% annually while its revenue grew
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Caesars Entertainment is trading at $26.63 per share, or 32.6x forward P/E. Dive into our free research report to see why there are better opportunities than CZR.

CTS (CTS)

Share Price: $39.19

With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE:CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.

Why Does CTS Give Us Pause?

1. Sales tumbled by 5.7% annually over the last two years, showing market trends are working against its favor during this cycle
2. Subscale operations are evident in its revenue base of $520.9 million, meaning it has fewer distribution channels than its larger rivals
3. Earnings per share have contracted by 4.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

CTS’s stock price of $39.19 implies a valuation ratio of 16.3x forward P/E. If you’re considering CTS for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking 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-small-cap company Exlservice (+354% 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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