A company's stock price doesn't necessarily reflect its market cap -- the value of all its shares combined. That said, lower-priced stocks tend to represent smaller companies and an opportunity for investors to get in on the ground floor of a long-term opportunity. Farfetch (FTCH -20.00%) and Curiosity Stream (CURI 1.91%) both trade for under $10 per share. Let's explore why they may not stay this cheap for long. 

Farfetch

Farfetch is an e-commerce platform focusing on luxury goods and apparel. With a stock price of just $7.32, the company's $2.84 billion valuation puts it in the mid-cap category. And while a recent slowdown in online shopping activity has dented growth, a dirt-cheap valuation and exciting acquisitions could signal a rebound. 

Dollar bill pinned to a dart board.

Image source: Getty Images.

Like many e-commerce companies, Farfetch enjoyed a boost during the COVID-19 pandemic as lockdowns encouraged consumers to shop from home. But now the industry has fallen back to Earth. Second-quarter revenue increased just 10.7% year over year to $579.3 million (compared to 43% this time last year). But the weakness has a lot to do with the extremely difficult comps against 2021 and macroeconomic challenges like inflation, which can be expected to ease over the long term.

Management also has compelling strategies to drive future growth by consolidating the online luxury fashion industry.

In August, the company acquired a 47.5% stake in Yoox Net-a-Porter, which operates several online fashion stores. According to CEO José Neves, the deal makes Farfetch "a leading global platform for luxury fashion" and could unlock synergies between the two businesses as Farfetch implements its end-to-end online retail technology (which involves seamlessly integrating and fulfilling third-party sales) for its new partner. 

Curiosity Stream 

Down 81% year to date (to $1.22 per share), Curiosity Stream has been a disaster for its early investors. But the video streaming platform seems wildly oversold by the market. Its unique niche in educational content and rapid top-line growth rate make the shares too cheap to ignore. 

Second-quarter revenue jumped 46% year over year to $22.3 million as total subscribers grew 25% to 25 million. Curiosity Stream is also refining its user monetization through strategies such as its annual smart bundle package, which offers additional content for $69.99 per year compared to its $2.99 per month ($35.88 annually) standard package. That said, the platform is still quite cheap compared to big rivals such as Netflix, which starts at $9.99 for its basic plan without ads. 

Curiosity Stream's ultra-low subscription price is a unique selling point over rivals and gives management room to boost revenue and margins by possibly increasing prices in the future. The company is also exploring new synergistic opportunities such as factual audio content and podcasts, which meshes well with its educational focus. 

With a market cap of just $70 million, Curiosity Streams has a price-to-sales (P/S) ratio of just 0.80, which means the company is worth less than one year of revenue. While management hasn't yet highlighted a pathway to profits, this valuation looks stunningly low for a company still growing at double digits. And it's hard to see shares staying this cheap for long. 

Betting on a rebound 

Farfetch and Curiosity Stream have both posted substantial stock price declines this year. Despite the near-term challenges, both companies look capable of turning the ship around because of their potentially lucrative niches and long-term growth potential. It is unclear when the current stock market slump will end, but these stocks could make a cheap and highly rewarding way for investors to bet on a rebound.