Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.

The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.

Red Robin (RRGB)

Share Price: $4.66

Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.

Why Should You Dump RRGB?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Sales were less profitable over the last five years as its earnings per share fell by 49.3% annually, worse than its revenue declines
3. High net-debt-to-EBITDA ratio of 14× could force the company to raise capital at unfavorable terms if market conditions deteriorate

Red Robin’s stock price of $4.66 implies a valuation ratio of 1.4x forward EV-to-EBITDA. To fully understand why you should be careful with RRGB, check out our full research report (it’s free).

Beyond Meat (BYND)

Share Price: $3.25

A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.

Why Do We Steer Clear of BYND?

1. Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders

At $3.25 per share, Beyond Meat trades at 0.7x forward price-to-sales. Read our free research report to see why you should think twice about including BYND in your portfolio, it’s free.

EVgo (EVGO)

Share Price: $2.47

Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.

Why Do We Think Twice About EVGO?

1. Poor expense management has led to operating losses
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

EVgo is trading at $2.47 per share, or 160x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than EVGO.

Stocks We Like More

The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.

Get started 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.