3 Stocks Under $50 Worth Buying in July

The recent fascination with low-priced stocks has drawn investors to companies like SoFi Technologies and Nu Holdings, which boast sub-$50 price tags, double-digit revenue growth, and constructive Wall Street consensus. However, beneath this surface-level appeal lies a more nuanced reality – one that highlights the perils of chasing cheap stocks without adequately considering their fundamental value.

SoFi Technologies is a prime example of this trend. The digital bank’s record loan originations and impressive revenue growth have made it an attractive investment opportunity. Nevertheless, its 52-week high of $32.73 is now a distant memory, with the stock trading at around $16.84 on July 17. This drawdown may seem like an attractive entry point, but investors should remember that SoFi’s underlying franchise is accelerating – which explains why its valuation has taken a hit in the first place.

The company’s Q1 2026 results were nothing short of impressive: revenue growth of 6.1% year over year, beating consensus by 4.87%, and GAAP net income more than doubling year over year. However, beneath these numbers lies a more complex story. SoFi’s Technology Platform segment took a hit due to a large client departure, while personal loan charge-offs climbed to 3.03%. The stock also carries a forward P/E of 31 – which prices in continued execution.

Nu Holdings, the Latin American digital bank behind Nubank, is another example of this trend. While it may have seen its price dip by 20.12% year to date, its recent pullback has compressed its multiple on one of the fastest-growing banks in the world. However, Nu’s valuation story is not dissimilar from SoFi’s – both companies are trading at multiples that seem to be pricing in continued execution.

The emergence of digital banks like SoFi and Nu Holdings has disrupted traditional valuation metrics by offering a unique blend of financial services and innovative technologies. This disruption has created new challenges for investors, particularly when it comes to valuing these companies. As investors scramble to build positions with limited capital, they’re being drawn into a market where traditional valuation metrics no longer apply.

Investors need to be more discerning in their approach – taking into account factors like growth rates, revenue multiples, and earnings forecasts. They should look beyond the surface-level appeal of cheap stocks, instead focusing on underlying fundamentals. This means carefully evaluating each company’s financials, management team, and industry trends before making an investment decision.

In the case of SoFi Technologies and Nu Holdings, investors need to consider their growth prospects, revenue multiples, and earnings forecasts. While these companies have impressive growth rates and revenue growth, their valuations are high due to expectations of continued execution. Investors should be cautious not to overpay for these stocks, as they may face significant challenges in the future.

Ultimately, investing in cheap stocks requires a nuanced approach that takes into account both the surface-level appeal and underlying fundamentals. By doing so, investors can avoid falling prey to the perils of chasing cheap stocks without adequately considering their fundamental value.