Keeping an eye on the stock market? As the main stock indices like S&P 500 and Nasdaq continue to climb, penny stocks are becoming pretty attractive for those looking for significant returns. Yes, these stocks can be a bit of a gamble but the potential winnings could be huge — especially in a thriving market.
Among all these penny stocks out there, there are three that I would suggest keeping your eye on due to their solid foundations and promising growth prospects. These brands are on the road to recovery after seeing a sharp fall in their stock prices. I think that these are contrarian picks that have a bright future ahead of them.
There’s also some friendly guidance from Russell 2000 Elliott Wave analysis suggesting we might presently find ourselves in trending markets, as per FXStreet. There’s talk of an expected primary upward trend. This index tracks 2000 small-cap companies in the U.S., so it could be a boon for these penny stocks correcting their fortunes.
So here are three penny stocks for investors to consider.
Grab (GRAB)
Grab (NASDAQ:GRAB) is a super-app that provides mobility, delivery, financial services and enterprise solutions in the markets of Singapore, Malaysia, Indonesia and other countries of Southeast Asia.
In 2024, for the first quarter, GRAB registered revenues of $653 million which is a 29% increase when compared to the revenues of the same quarter in the previous year. Mobility revenues were up by 27% year-over-year, with the rise in both domestic and international traffic.
GRAB has given revenue guidance for this year which is expected to be between $2.70 billion and $2.5 billion, which is a 14%-17% YOY. Also, the company has raised its guidance for the adjusted EBITDA to $250-$270 million, from the initial guidance of $180-$200 million.
This has been welcomed by analysts as good results. Barclays’ analyst Jiong Shao has upgraded the price target 9.3% to $4.7 and retained a “strong buy” recommendation on the shares. In sum, all the top rated analysts categorize the stock as “strong buy” or “buy.”
Plug Power (PLUG)
I have always been a fan of Plug Power (NASDAQ:PLUG) for investors. As InvestorPlace pointed out before, some positivity following a major decline could lead to the revival of the PLUG stock. The company has worked to address its previous ‘going concern’ problems, thus, high risk-takers may consider investing a little amount.
It is crucial to mention that despite the fact that PLUG’s risk stands rather high, the company is not among those that are widely discussed, although it should be. These risks include a class-action lawsuit on behalf of investors who have suffered great losses.
PLUG recorded revenues of $120 million in the first quarter of this year. The company also focused on improved cash management where net cash used in operating activities and capital expenditures was cut by 38% quarter-over-quarter and 42% YOY.
Plug Power expects to generate revenue of between $1.6 billion to $1.8 billion for the fiscal year ending 2024. This they project to be around negative $200 million to negative $150 million of adjusted EBITDA, which is a better projection as compared to the prior expectations.
Desktop Metal (DM)
Desktop Metal (NYSE:DM) is a firm that deals with the design and manufacturing of industrial equipment in additive manufacturing technology commonly known as 3D printing. The company’s performance has been on the rise in terms of its financial standing in the recent past, and I believe it could be one of those penny stock prodigals that will make a strong recovery.
DM revealed its financial performance for the first quarter of 2024 and has recorded a slight decline in revenue to $40.6 million from $41.3 million. It reported a net loss of $52.1 million mainly due to one-time charges for accelerated amortization and depreciation. Still, the adjusted EBITDA grew by 44% YOY.
DM also reiterates its full-year guidance for 2024, stating that it expects its revenue to be between $175 million and $215 million. According to the company, it expects adjusted EBITDA to be between a negative $30 million and $10)million for the entire year. Desktop Metal is optimistic about hitting positive adjusted EBITDA in the second half of 2024 because of its cost-cutting measures and projected sales, which gives me confidence for its future.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
