The past three years have been a spectacle of sorts, a peculiar dance of numbers and charts that has left many investors breathless. The S&P 500 has surged by 87% since its nadir in October 2022, an ascent so steep it feels almost unnatural. Growth stocks, those volatile creatures, have fared even better, doubling their value in the same span. But behind this glittering façade lies a truth too often ignored: as prices climb, bargains grow scarce. For the cautious investor with $100 to spare, finding a foothold in this overheated market is no small feat.
Yet, there are still opportunities-quiet, unassuming companies whose potential remains untapped by the masses. These are not the giants whose names echo through financial newsrooms but smaller entities with the promise of future greatness. Below, I present three such stocks, all trading below $100 per share, each carrying within it the seeds of growth.
1. Block
Block (XYZ) is a curious blend of merchant services and consumer finance, known for its Cash App and Square platforms. Once driven by Square’s expansion among merchants, the company now finds its momentum shifting toward Cash App, a tool that has become a lifeline for millions navigating the digital economy. This shift was not without its hiccups; when Cash App’s profit growth faltered in the first quarter, the stock plummeted. Yet, like a seasoned captain righting a listing ship, management steered the segment back on course, accelerating gross profit growth in the second quarter.
Cash App’s resurgence owes much to its ability to deepen user engagement. By layering additional services onto its platform-such as the Cash App Card and the nascent Cash App Borrow-it has begun to extract more value from each user. More intriguing, however, is its focus on younger consumers. Users under 25, a demographic notorious for its limited spending power, are already showing remarkable engagement, depositing paychecks and using the app at higher rates than older cohorts. As these users mature, their economic influence will likely swell, propelling Cash App’s profits further.
At $75 per share, Block trades at 29 times forward earnings-a fair price for a company whose growth trajectory remains intact. The fintech sector is rife with risks, but Block’s dual engines of merchant services and consumer finance offer a rare balance of stability and opportunity.
2. DraftKings
DraftKings (DKNG) stands as one of the titans of sports betting in North America, a position it has earned through relentless innovation. It was among the first to offer live betting and in-game parlays, features that have kept it ahead of a growing pack of competitors. Yet, competition is fierce, and the landscape is shifting beneath its feet. ESPN’s entry into sports betting last year and the rise of prediction markets using futures contracts have introduced new threats.
Despite these headwinds, DraftKings continues to grow. Its adjusted EBITDA rose by 37% in the second quarter, reversing a dip caused by unfavorable outcomes in the NCAA Basketball Championship Tournament earlier in the year. The company’s resilience is commendable, but challenges loom large. A new tax code limiting gamblers’ deductions could thin the ranks of professional bettors, potentially reducing handle sizes. Yet, this may also improve margins, as fewer high-volume players mean less strain on promotional spending.
Trading at $48 per share, DraftKings commands an enterprise value to EBITDA ratio of about 29, based on 2025 projections. For a company growing at a mid-30% clip, this valuation seems reasonable. Though the road ahead is fraught with uncertainty, DraftKings’ technological edge and adaptability make it a worthy candidate for investment.
3. Roku
Roku (ROKU) is the linchpin of the connected-TV revolution, a leader in a domain where traditional television is steadily losing ground. The pandemic years were kind to Roku, as millions turned to its platform for entertainment. But the post-pandemic world has brought its own trials: inflation, macroeconomic turbulence, and now tariffs have weighed heavily on its results.
Roku’s strategy has been paradoxical. While its device sales operate at a loss-or barely break even-its platform business thrives. Platform gross margins hover around 50%, buoyed by the steady migration of ad budgets from linear TV to streaming. This segment now dwarfs device sales, accounting for six times the revenue. As Roku pushes toward GAAP profitability, its operating leverage becomes increasingly apparent. In the most recent quarter, adjusted EBITDA soared by 79% year over year, a testament to the strength of its advertising model.
Trading just below $100, Roku’s enterprise value to EBITDA ratio stands at approximately 33, based on 2025 estimates. For a company benefiting from the secular shift in advertising, this valuation appears justified. Roku’s dominance in connected TV ensures it a long runway for growth, even as the industry evolves.
These three companies-Block, DraftKings, and Roku-are not flawless. Each carries risks, some visible, others lurking in the shadows. Yet, they represent what the discerning investor seeks: potential tempered by reality, growth balanced by prudence. To invest in them is to acknowledge both the promise and peril of our times. And so, with a wary eye and a steady hand, one might consider adding them to a portfolio. 🌱
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2025-09-06 01:44