Price is sometimes an indicator of quality, whether on equity markets or elsewhere. But just because a stock has a low sticker price doesn't mean it isn't worth considering. Investors can find highly promising corporations whose shares are changing hands for under $20 apiece.

Let's consider two examples: Exelixis (EXEL 1.93%) and Snap (SNAP -4.14%). While these two companies have encountered issues recently, both are worth holding on to for the long haul. Here is why.

1. Exelixis

Humans have yet to eradicate diseases. Until that happens, biotech companies like Exelixis will be incredibly valuable. Moreover, this drugmaker focuses on one of the deadliest illnesses: cancer. Exelixis has created an in-house culture centered around developing oncology medicines, particularly where an unmet need exists. The company is best known for Cabometyx, which treats certain forms of liver and kidney cancer. 

Exelixis is working on zanzalintinib, another promising medicine. Zanzalintinib is a tyrosine kinase inhibitor (TKI) or a targeted therapy that attacks and destroys cancer cells. Zanzalintinib started a phase 3 study in June 2022 in treating metastatic colorectal (colon and rectal) cancer. In line with Exelixis' strategy, there is a severe unmet need here.

Colorectal cancer is the third most common and the third leading cause of cancer death in the U.S. But when it is caught in the early stages, the five-year survival rate typically stands at around 90%. The survival rate drops substantially once the disease metastasizes. A new treatment option that addresses metastatic colorectal cancer could help improve patient outcomes in this area.

Zanzalintinib is also being tested in a phase 3 study in treating advanced kidney cancer. Exelixis has several early-stage compounds that should move forward and start late-stage studies within the next couple of years. The company should also earn new indications for Cabometyx -- thereby resulting in higher sales -- while making steady progress with zanzalintinib.

Exelixis has generally recorded growing revenue and earnings over the past decade. The company should be able to continue doing that for a long time. 

EXEL Revenue (Annual) Chart

EXEL Revenue (Annual) data by YCharts

2. Snap

Social media has become an integral part of modern life, and Snap -- the company behind Snapchat -- is a prominent player in this field. There are two key reasons why Snap will likely remain around for a long time. First, demographic differences exist regarding who uses social media, including Snapchat. Millennials and Gen Zers are more likely to partake than older generations.

That's hardly surprising. Social media is a relatively recent phenomenon. Those who were introduced to it from an early age will make up a large percentage of the world's population in the decades to come, which should benefit companies like Snap. Second, there is a network effect in play here. People want to connect with their friends on social media, and the more users Snapchat has, the more attractive it becomes to the next person. 

Other important dynamics make Snapchat enticing. Snap gathers data on users' habits and the content they enjoy watching on features like Discover. That allows the company to recommend similar content to its users, keeping them glued to their screens. More engagement makes the platform more attractive to advertisers. Snap ended the first quarter with 383 million daily active users, an increase of 15% year over year.

However, the company's revenue has been declining -- coming in at $988.6 million, 7% lower than the year-ago period. Revenue dropped despite rising engagement because revenue per 1,000 ad impressions has declined. Snap also isn't profitable, with its net loss of $328.7 million in the first quarter coming in slightly higher than the $359.6 million net loss reported in the first quarter of 2022. 

Snap should be able to address the top-line declines as the advertising industry -- which has slowed considerably over the past year -- inevitably rebounds. The company's revenue has generally been on an upward path, as has its gross margin.

SNAP Revenue (Annual) Chart

SNAP Revenue (Annual) data by YCharts

Meanwhile, Snap is trying to reduce expenses and costs to achieve profitability. That's before you get into the company's augmented reality ambitions and efforts to diversify its revenue base with its paid subscription feature, Snapchat+. In my view, the company's stock price of just under $10 as of this writing does not reflect its long-term potential. At these levels, Snap is worth keeping in your portfolio as a long-term investment.