3 Stocks Under $10 with Warning Signs

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 downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead.

The ONE Group (STKS)

Share Price: $2.91

Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.

Why Does STKS Fall Short?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3. 7× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

The ONE Group is trading at $2.91 per share, or 6.3x forward P/E. Check out our free in-depth research report to learn more about why STKS doesn’t pass our bar.

Gray Television (GTN)

Share Price: $5.78

Specializing in local media coverage, Gray Television (NYSE:GTN) is a broadcast company supplying digital media to various markets in the United States.

Why Is GTN Risky?

1. Sales were flat over the last two years, indicating it’s failed to expand its business
2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 5.3 percentage points
3. 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

Gray Television’s stock price of $5.78 implies a valuation ratio of 0.7x forward EV-to-EBITDA. To fully understand why you should be careful with GTN, check out our full research report (it’s free).

Quest Resource (QRHC)

Share Price: $1.56

Recycling corporate waste to help companies be more sustainable, Quest Resource (NASDAQ:QRHC) is a provider of waste and recycling services.

Why Do We Steer Clear of QRHC?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last two years
2. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $1.56 per share, Quest Resource trades at 5.6x forward P/E. Read our free research report to see why you should think twice about including QRHC in your portfolio.

High-Quality Stocks for All Market Conditions

Trump’s April 2025 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).

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