3 Penny Stocks Set to Surge 500% by 2026: June Edition


  • These are the penny stocks to buy for five-bagger returns within the next 24 months.
  • Archer Aviation (ARHR): Received certification from the U.S. FAA for commercialization of eVTOL in 2025.
  • Lithium Americas (LAC): Lithium supply shortage expected as soon as 2025 and the company has high-quality lithium assets.
  • Cronos (CRON): Sharp upside likely to be supported by regulatory tailwinds and geographic expansion that will boost revenue growth.
penny stocks - 3 Penny Stocks Set to Surge 500% by 2026: June Edition

Source: Vitalii Vodolazskyi / Shutterstock.com

Penny stocks have the tendency to surprise when it comes to delivering stellar returns at the blink of an eye. A good example is Novavax (NASDAQ:NVAX) that has delivered 203% returns for year-to-date. With the meme stock euphoria on the cards, it’s likely that 3x to 5x returns will be seen in a matter of weeks.

I would, however, prefer to remain conservative and focus on quality ideas within the penny stocks space. It makes sense to buy a stock that steadily trends higher than buying an idea that surges by 100% in few days and subsequently collapses.

Therefore, I have considered penny stocks that represent companies with a promising business outlook. Further, the ideas discussed have company or industry specific catalysts that are likely to support a big rally.

In my view, the penny stocks discussed can surge by 500% by June 2026. This rally from oversold levels is likely to sustain and I would look at new targets based on business developments once the initial upside is achieved. Let’s discuss the reasons to be bullish on these non-speculative penny stock ideas.

Archer Aviation (ACHR)

Person holding cellphone with logo of American eVTOL aircraft company Archer Aviation Inc. (ACHR) on screen in front of webpage. Focus on phone display. Unmodified photo.
Source: T. Schneider / Shutterstock.com

Archer Aviation (NYSE:ACHR) stock has been subdued with a correction of 13% in the last 12 months. However, the sell-off in the recent past seems to be overdone and I expect a big reversal rally for this eVTOL stock.

In a big news this month, Archer received “Part 135 Air Carrier & Operator Certificate” certificate from the U.S. Federal Aviation Authority. The certification sets the stage for commercialization of eVTOL aircraft in the U.S. next year.

It’s also worth noting that Archer has aggressive plans for international expansion. The flying car company is likely to launch operations in the UAE in 2025. Moreover, Archer has stitched a local partnership for expansion in India in 2026. Last month, Archer also announced possible commercialization of eVTOL operations in South Korea in 2026 with KakaoMobility.

Clearly, Archer is preparing a strong base for robust growth in the next few years. I must add here that the company is building its manufacturing facility in the state of Georgia. Once completed, the facility will have the capability to manufacturing 650 eVTOL annually. This will support scaling-up of operations in the next 24 to 36 months.

Lithium Americas (LAC)

smartphone with logo of Canadian company Lithium Americas Corp on screen
Source: Wirestock Creators / Shutterstock.com

In my view, lithium stocks are grossly overvalued and it’s a good time to accumulate for multi-bagger returns in the medium to long term. Lithium Americas (NYSE:LAC) has the potential to skyrocket from current levels of $3 and a market valuation of just $660 million.

The first point to note is that the reversal in lithium is inevitable. There are analysts who believe that lithium shortage can come as early as next year. Once lithium reverses, some of the best stocks in the sector will skyrocket.

Specific to Lithium Americas, the Thacker Pass project is a long-term cash flow machine. The asset has a mine life of 40 years with an after-tax net present value of $5.7 billion. Also, the lithium miner expects average annual EBITDA of $2 billion from the asset once both phases commence production.

Lithium Americas is also well financed with the recent conditional loan commitment of $2.26 billion from the U.S. Department of Energy. The focus will therefore be on the progress of construction at the Thacker Pass site and potential upside in lithium prices.

Cronos (CRON)

scientist checking organic hemp wild plants in a cannabis weed commercial greenhouse. Concept of herbal alternative medicine, cbd oil, pharmaceutical industry. Cannabis stocks, FLGC stocks
Source: Chokniti-Studio / Shutterstock.com

Some of the best cannabis stocks are likely to go ballistic in the coming quarters. The reasons include waning of regulatory headwinds, accelerated growth and companies achieving EBITDA margin break-even. Cronos (NASDAQ:CRON) is possibly the best bet among cannabis companies considering the fundamentals.

It’s worth noting that CRON stock has trended higher by 43% in the last 12 months. However, the cannabis company remains undervalued. I would not be surprised with 5x or 10x returns from current levels if regulatory decisions support industry growth.

An important point to note is that Cronos is sitting on a cash buffer of $855 million. That’s 89% of the company’s current market valuation. The cash buffer is likely to be utilized for geographic expansion coupled with potential acquisitions.

As a matter of fact, Cronos has made entry into three new markets in the recent past. This includes Germany, Australia and the United Kingdom. This will help in accelerating revenue growth and I expect margin improvement on the back of operating leverage.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/3-penny-stocks-set-to-surge-500-by-2026-june-edition/.

©2024 InvestorPlace Media, LLC