
Investors who are just starting may not have substantial funds to invest in the stock market at the moment. The ongoing challenge of inflation is impacting many household budgets, and for some, investing might not be a current priority. However, it is understood by savvy investors that initiating their investment journey holds significant importance.
Fortunately, numerous brokerages facilitate investing with any amount, even as little as $100. Some platforms allow the purchase of fractional shares, which can be particularly useful in the current market where finding stocks priced under $100 per share can be challenging. Nonetheless, there is a certain appeal to owning a full share of a company’s stock, providing a sense of genuine shareholder status.
Here are three promising stocks available for less than $100 that could be potential starting points for investors:
PayPal (PYPL 0.38%)
PayPal experienced a surge in its business at the onset of the COVID-19 pandemic. However, as consumer behavior began to stabilize, the company encountered growth challenges. Its branded checkout service, which offers a seamless payment process on e-commerce platforms, saw a mere 6% annual increase in total payment volume during the second quarter. This is significant as profits on branded checkout outpace those of unbranded card processing, which now forms a major part of PayPal’s payment processing business. Despite this, Mizuho analyst Dan Dolev suggests that PayPal is still capturing a significant market share, with only a limited number of large merchants outpacing its branded checkout growth.PayPal’s dual-sided network of merchants and consumers provides a competitive edge. Consumers trust and find PayPal convenient, attracting more merchants to the platform. Higher checkout rates with PayPal benefit merchants financially, potentially securing the company’s long-term relevance despite competitive pressures. Trading at approximately $81, PayPal’s shares are valued at less than 17 times forward earnings projections, reflecting a strong position in the expanding e-commerce market, likely leading to notable revenue growth and margin protection.
CarMax (KMX -0.80%)
CarMax has encountered a tough landscape over the past few years due to escalating and sustained high interest rates. The increase in inflation and borrowing costs for auto loans has complicated car affordability, both new and used. However, recent indicators suggest a potential recovery, with comparable-store unit sales rising 4.3% year-over-year last quarter, a peak not seen since 2022, though offset by a 4.6% drop in average selling prices. Importantly, gross profit per vehicle remained stable, indicating improved gross margin even amidst these challenges.The financial arm of CarMax is also navigating a rough terrain, with increased loan loss provisions impacting net income, resulting in a 14.4% decline in reported earnings from CarMax Auto Finance last quarter. Nonetheless, industry-wide challenges notwithstanding, CarMax’s minimal reliance on subprime loans may yield better future earnings reports.
CarMax’s unique business model, difficult to replicate despite market challengers, leans on consumer preference for transparent pricing, distinguishing it from traditional dealerships. This should enable gradual revenue growth and restoration of pre-pandemic gross margins as supply normalizes. With an expected earnings recovery next year, the stock currently trading at about 19 times fiscal 2026 earnings forecasts, offers an appealing investment opportunity at around $72.
Roku (ROKU 1.66%)
Roku is the predominant connected-TV platform in the United States, commanding 47% of streaming time—over triple that of its nearest competitor. It also holds the top spot among TV operating systems in Mexico and Canada, with platform engagement increasing by 20% year-over-year last quarter.Nonetheless, Roku has faced pressures on its operating income due to a challenging advertising market while working to maintain low device prices to broaden business scale. This situation transformed its net income from a positive $242 million in 2021 to a $710 million loss in 2023. However, Roku is making progress in reversing this trend, with net losses decreasing in 2024, alongside strong user metrics. The company added two million new users last quarter, and household engagement is on the rise. Although monetization remains flat compared to last year, management anticipates platform revenue growth will accelerate in 2025 with recovering advertising demand and expanded inventory through new products.
The long-term outlook for Roku is positive as the shift from linear TV to streaming continues. Media companies are increasingly steering users toward streaming platforms, aiming for better control over user experience, data, and advertising. Roku, holding 47% market share, remains a vital partner. As the streaming market expands, Roku is poised to increase its share substantially. Currently trading around $75, Roku is valued at less than three times sales, which is low relative to its historical multiple, suggesting strong sales acceleration prospects and clear strides toward profitability at scale.