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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here is one stock under $50 with massive upside potential and two that may have trouble.
Two Stocks Under $50 to Sell:
Alarm.com (ALRM)
Share Price: $47.67
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ: ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Why Do We Think ALRM Will Underperform?
- Offerings struggled to generate meaningful interest as its average billings growth of 8.4% over the last year did not impress
- Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its two-year trend
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
Alarm.com is trading at $47.67 per share, or 2.5x forward price-to-sales. Read our free research report to see why you should think twice about including ALRM in your portfolio.
Marcus & Millichap (MMI)
Share Price: $30.42
Founded in 1971, Marcus & Millichap (NYSE: MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Why Is MMI Risky?
- Muted 1.9% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Poor free cash flow margin of 6.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Marcus & Millichap’s stock price of $30.42 implies a valuation ratio of 41.6x forward P/E. If you’re considering MMI for your portfolio, see our FREE research report to learn more.
One Stock Under $50 to Buy:
IMAX (IMAX)
Share Price: $35.31
Originally developed for World Expo '67 in Montreal as an innovative projection system, IMAX (NYSE: IMAX) provides proprietary large-format cinema technology and systems that deliver immersive movie experiences with enhanced image quality and sound.
Why Is IMAX a Good Business?
- Market share has increased this cycle as its 23.5% annual revenue growth over the last five years was exceptional
- Free cash flow margin expanded by 23.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Historical investments are beginning to pay off as its returns on capital are growing
At $35.31 per share, IMAX trades at 20.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
