3 Stocks Under $50 Walking a Fine Line

Stocks trading between $10 and $50 can be particularly interesting as they frequently represent businesses that have survived their early challenges. However, investors should remain vigilant as some may still have unproven business models, leaving them vulnerable to the ebbs and flows of the broader market.

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.

American Eagle (AEO)

Share Price: $23.40

With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.

Why Does AEO Give Us Pause?

1. Muted 2.2% annual revenue growth over the last three years shows its demand lagged behind its consumer retail peers
2. Slow expansion of stores indicates a strategic shift toward maximizing returns from existing locations
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up

American Eagle’s stock price of $23.40 implies a valuation ratio of 14.1x forward P/E. Read our free research report to see why you should think twice about including AEO in your portfolio.

Arhaus (ARHS)

Share Price: $9.92

With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Why Do We Think Twice About ARHS?

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. Revenue base of $1.36 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Revenue growth over the past three years was nullified by the company’s new share issuances as its earnings per share fell by 13.8% annually

Arhaus is trading at $9.92 per share, or 21.1x forward P/E. To fully understand why you should be careful with ARHS, check out our full research report (it’s free).

QuidelOrtho (QDEL)

Share Price: $27.33

Born from the 2022 merger of Quidel and Ortho Clinical Diagnostics, QuidelOrtho (NASDAQ:QDEL) develops and manufactures diagnostic testing solutions for healthcare providers, from rapid point-of-care tests to complex laboratory instruments and systems.

Why Do We Pass on QDEL?

1. Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
2. Free cash flow margin shrank by 27.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

At $27.33 per share, QuidelOrtho trades at 12.8x forward P/E. If you’re considering QDEL for your portfolio, see our FREE research report to learn more.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.