Moody's Ratings Assigns B2 Rating To Kingpin's New Bridge Facility Following Real Estate Transaction, Outlook Remains Stable

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 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.

Portillo's (PTLO)

Share Price: $7.75

Begun as a Chicago hot dog stand in 1963, Portillo’s is a casual restaurant chain that serves Chicago-style hot dogs and beef sandwiches as well as fries and shakes.

Why Does PTLO Fall Short?

• Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
• Poor free cash flow margin of -0.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
• Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

At $7.75 per share, Portillo's trades at 18.7x forward P/E. To fully understand why you should be careful with PTLO, check out our full research report (it’s free).

Lucky Strike (LUCK)

Share Price: $9.47

Born from the transformation of traditional bowling alleys into modern entertainment destinations, Lucky Strike operates bowling alleys and other entertainment venues with upscale amenities, arcade games, and food and beverage services across North America.

Why Should You Dump LUCK?

• Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
• Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
• Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Lucky Strike’s stock price of $9.47 implies a valuation ratio of 31.7x forward P/E. Dive into our free research report to see why there are better opportunities than LUCK.

Funko (FNKO)

Share Price: $2.50

Boasting partnerships with media franchises like Marvel and One Piece, Funko is a company specializing in creating and distributing licensed pop culture collectibles.

Why Are We Out on FNKO?

• Annual sales declines of 9.7% for the past two years show its products and services struggled to connect with the market
• Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
• Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

Funko is trading at $2.50 per share, or 12x forward P/E. If you’re considering FNKO for your portfolio, see our FREE research report to learn more.

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 9 Market-Beating Stocks. 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).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.

Wall Street has set ambitious price targets for the stocks in this article. While this suggests attractive upside potential, it’s important to remain skeptical because analysts face institutional pressures that can sometimes lead to overly optimistic forecasts.

Luckily for you, we at StockStory have no conflicts of interest - our sole job is to help you find genuinely promising companies. Keeping that in mind, here is one stock where Wall Street’s excitement appears well-founded and two where consensus estimates seem disconnected from reality.

Two Stocks to Sell:

Lucky Strike (LUCK)

Consensus Price Target: $13.25 (38.3% implied return)

Born from the transformation of traditional bowling alleys into modern entertainment destinations, Lucky Strike operates bowling alleys and other entertainment venues with upscale amenities, arcade games, and food and beverage services across North America.

Why Do We Pass on LUCK?

• Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
• Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
• Short cash runway increases the probability of a capital raise that dilutes existing shareholders

Lucky Strike’s stock price of $9.58 implies a valuation ratio of 32x forward P/E. Check out our free in-depth research report to learn more about why LUCK doesn’t pass our bar.

Hope Bancorp (HOPE)

Consensus Price Target: $12.25 (23.9% implied return)

With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.

Why Do We Think HOPE Will Underperform?

• Net interest income stagnated over the last five years and signal the need for new growth strategies
• Operating profits fell over the last four years as its sales dropped and it struggled to adjust its fixed costs
• Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable

Hope Bancorp is trading at $9.89 per share, or 0.6x forward P/B. Read our free research report to see why you should think twice about including HOPE in your portfolio.

One Stock to Buy:

Globalstar (GSAT)

Consensus Price Target: $52.50 (102% implied return)

Known for powering the emergency SOS feature in newer Apple iPhones, Globalstar operates a network of low-earth orbit satellites that provide voice and data communications services in remote areas where traditional cellular networks don't reach.

Why Is GSAT a Top Pick?

• Annual revenue growth of 16.3% over the past two years was outstanding, reflecting market share gains this cycle
• Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 48.6% outpaced its revenue gains
• GSAT is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy

At $26 per share, Globalstar trades at 44.7x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.