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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $50 to swipe left on and some alternatives you should look into instead.
First Watch (FWRG)
Share Price: $11.42
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ: FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
Why Does FWRG Give Us Pause?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Cash-burning history makes us doubt the long-term viability of its business model
- High net-debt-to-EBITDA ratio of 8× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $11.42 per share, First Watch trades at 51.7x forward P/E. To fully understand why you should be careful with FWRG, check out our full research report (it’s free).
Energizer (ENR)
Share Price: $17.66
Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE: ENR) is one of the world's largest manufacturers of batteries.
Why Does ENR Fall Short?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Anticipated sales growth of 1.9% for the next year implies demand will be shaky
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Energizer is trading at $17.66 per share, or 5.1x forward P/E. Check out our free in-depth research report to learn more about why ENR doesn’t pass our bar.
The Pennant Group (PNTG)
Share Price: $35.36
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ: PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
Why Do We Think Twice About PNTG?
- Modest revenue base of $1.02 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Poor free cash flow margin of 1.9% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
The Pennant Group’s stock price of $35.36 implies a valuation ratio of 24.4x forward P/E. Read our free research report to see why you should think twice about including PNTG in your portfolio.
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