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. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Sonos (SONO)
Share Price: $15.36
A pioneer in connected home audio systems, Sonos (NASDAQ: SONO) offers a range of premium wireless speakers and sound systems.
Why Do We Avoid SONO?
- Annual sales declines of 1.4% for the past five years show its products and services struggled to connect with the market
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 9.3% annually, worse than its revenue
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 6.2% for the last two years
Sonos’s stock price of $15.36 implies a valuation ratio of 1.2x forward price-to-sales. Read our free research report to see why you should think twice about including SONO in your portfolio.
Lazard (LAZ)
Share Price: $43.75
Tracing its roots back to 1848 when it began as a dry goods merchant in New Orleans, Lazard (NYSE: LAZ) is a global financial advisory and asset management firm that provides strategic advice to corporations, governments, institutions, and wealthy individuals.
Why Is LAZ Not Exciting?
- Muted 3.2% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings per share fell by 9.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Lazard is trading at $43.75 per share, or 13x forward P/E. If you’re considering LAZ for your portfolio, see our FREE research report to learn more.
TowneBank (TOWN)
Share Price: $35.69
Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.
Why Do We Think Twice About TOWN?
- 5.2% annual revenue growth over the last five years was slower than its banking peers
- Expenses have increased as a percentage of revenue over the last five years as its efficiency ratio degraded by 8.5 percentage points
- Annual tangible book value per share growth of 4% over the last two years was below our standards for the banking sector
At $35.69 per share, TowneBank trades at 1x forward P/B. Dive into our free research report to see why there are better opportunities than TOWN.
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
