Continued market doldrums are helping to keep share prices low, and that could be a boon for those looking to put their money to work in the market. Moreover, there are some great stocks to be had at smaller amounts of less than $100 per share. Below are three stocks consider.
Coffee chain Dutch Bros (BROS 1.26%) is growing and expanding beyond its traditional focus on the western United States. Roku (ROKU 1.58%) remains in the No. 1 spot for streaming TV in North America and seems ready for a rebound. Chewy (CHWY 1.92%) continues to offer an ever-expanding selection of pet products and has also revamped its pet insurance program.
Let's dive in.
Dutch Bros plays with the big boys now
Dutch Bros boasts a wide selection of high-quality coffees and energy drinks, but it's usually the company culture that gets everyone talking, with the company's "broistas" offering energetic, friendly greetings to each visitor. Since its September 2021 IPO, the company has doubled its annual expansion targets each year and remains on track to hit its ambitious five-year goal of having 800 shops by the end of 2023, according to CEO Joth Ricci.
Its recent performance fell short of analysts' expectations, but still reflected well on the strength of the company and its continued growth. This indicates now may be a good time to get in on cheaper stock prices ahead of the next quarterly report. Revenue at company-owned stores grew 53.7% year over year in the most recent quarter, and gross profits more than doubled to $38.8 million.
Ricci also noted that Dutch Bros remains on track for revenue to approach $1 billion by 2025, making this a sound sub-$100 pick to buy and hold.
Roku seems ready for a rebound
While its share price and market capitalization soared during the early days of the pandemic, Roku has come back down to Earth since summer 2021. The crisis showcased just what consumer discretionary electronics can do as people quickly turned to alternative forms of entertainment, and Roku brings both its own streaming services and the hardware to power them to the table. This gives it a competitive edge that may be of great value to the Roku's growth potential.
More recently, the California-based company announced a series of marketing initiatives to improve its position as a competitor to big players like Netflix. Snapping up children's programming from kids-and-family-focused studio pocket.watch and offering new seasons of exclusive cooking shows helps it build its brand and attract loyal viewers. A marketing partnership with Doordash (NYSE: DASH) is helping Roku find its way into even more homes where its devices may be present, but their full functionality remains underutilized.
Roku struggled from a financial perspective in 2022, with its fourth-quarter earnings report showing net losses of $1.70 per share versus the previous year's gain of $0.18 per share as the return to normalcy continued for many viewers. Similarly, the company lost $237 million in Q4 versus the prior-year period's net income of $23.6 million.
However, Roku remains the No. 1 streaming TV platform in North America by hours, and further investment by the company in this arena may well prove a linchpin in its overall strategy, allowing a quick return to adjusted profitability by the end of 2024, which was a goal set by company management.
Chewy offers more than just a treat for investors
Much like Roku, Chewy's business boomed during the stay-at-home days of the pandemic, and has since come down from those soaring height in the economy's gradual return to normalcy.
A share price that once neared $120 showcased what the company can do, and the stock has tended to remain above where it was in the years leading up to the pandemic. December's earnings report indicated continued strength with 14.5% net sales improvement year over year and net income of $43 million versus 2021's loss of $10 million for the prior-year quarter.
The pet food and accessories provider continues to add to its offerings, launching its CarePlus pet healthcare and insurance service in 2022, and expanding it via a partnership with insurer Lemonade later in the year. With the enhanced pet insurance plans set to launch this spring, investors may now see a strong window of opportunity to pick up the stock while it remains in the two-shares-for-$100 range.
Making the most of a $100 investment
Each of these companies represents a strong investment opportunity for those looking to pick up shares for less than $100, but investors must choose wisely. While Dutch Bros continues to advance on its goal of 800 shops, that still puts it far behind market leader Starbucks, which has approximately 35,000 stores worldwide. Dutch Bros recognizes that its concentration in the western United States remains a challenge it must overcome through aggressive expansion.
Roku also has a long way to go to reach a level where it could challenge the biggest players in the streaming space. Chewy's ever-expanding product line is one of its greatest advantages, but the company notes that it must continue to introduce new products, improve its existing offerings, and develop new services to sustain growth.
Risks remain an inherent part of investing, and while it may seem a small amount to get started, $100 invested in these producers of consumer goods and services now may well pay off over the next three to five years.
