Lately, the stock market has been soaring thanks mostly to growth stocks trading at sky-high valuations. While rate cuts could potentially boost markets, caution is still warranted for most investors. Indeed, many smaller-cap stocks, and those trading under $15 per share could see big upside, but carry outsized risk.
This is the tradeoff that most long-term investors continue to face. Loading up on companies that could benefit from rate cuts also coincides with the reality that an incoming recession could be the underlying reason for these rate cuts. In such a scenario, only the most profitable and fundamentally sound companies may outperform.
I’m going to highlight three stocks under $15 with the best risk-reward in this current environment. Let’s dive into these more speculative picks. They may be well-suited as individual stock picks for long-term growth investors right now.
SoFi Technologies (SOFI)
In its successful Q1 of fiscal year 2024 earnings report, SoFi Technologies (NASDAQ:SOFI) saw an impressive 54% year-over-year (YOY) revenue increase in its tech platform and financial services segments. The company has been consistently showing optimistic numbers for the past 12 quarters, impressing investors. Also, SOFI Money saw a 61% increase in accounts, with a 150% debit transaction volume increase. Impressively, SoFi Technologies has seen sustained growth. And it has expanded services to highlight its potential, despite SOFI stock trading at less than $10 per share.
Additionally, the company flourished in 2023, as revenue rose 35% and its customer base surged 44%. And, the firm expanded its student loans and financial services, projecting a 17.4% revenue through 2026. Despite a slowdown, this trend remains promising. The vast U.S. financial services industry is dominated by major banks with $9.5 trillion in assets. And this underscores the market opportunity for SoFi Technologies over the long-term.
The stock saw a 21% stock due to loan forgiveness and rising delinquencies. Yet, SOFI’s fintech business excels with strong user growth and profitability. Its all-digital model attracts younger users, reduces costs and positions it well in the current competitive market.
Vistagen (VTGN)
Penny stock Vistagen (NASDAQ:VTGN) is a standout biotech with a promising pipeline. The company’s portfolio includes depression drugs like itruvone, fasedienol and PH80. Its strong cash position and upcoming Phase III trial for fasedienol could drive stock gains over the long-term. That is, if regulators officially approve these drugs for patients, and the company sees the kind of uptake it expects.
Recently, Vistagen expanded its global IP portfolio by securing new patents for its PH80 migraine treatment. The new patents, granted in Australia, Hong Kong, Japan and Mexico, extend IP protection until 2040, complementing existing U.S. and European patents.
The company’s PH80 drug targets neurocircuitry without systemic absorption, aiming to help patients manage menopause, PMS and migraines. Vistagen’s pherine compounds, show strong safety profiles and are in development for psychiatric and neurological disorders.
Right now, this is a stock on my watch list. But for investors looking to add more speculative growth exposure, VTGN is certainly worth consideration at current levels.
Bitfarms (BITF)
Despite recent corrections, Bitcoin (BTC-USD) continues to see bullish sentiment build. A number of top crypto experts have predicted Bitcoin could hit the six-figure level, with some calling for $200,000 Bitcoin by 2025. Thus, this token’s performance could drive outsized gains for Bitcoin miners such as Bitfarms (NASDAQ:BITF).
With no debt and $124 million in liquidity, Bitfarms expects its hash rate to grow from 10.4EH/s to 35EH/s by 2025. With low-cost operations, Bitfarms is set for significant revenue and EBITDA growth, potentially delivering 5x to 10x returns over the medium-term, for investors who remain bullish on the narrative around Bitcoin mining moving forward.
On July 16, Bitfarms held a virtual fireside chat with new Chief Executive Officer Ben Gagnon and Chief Financial Officer Jeff Lucas, discussing the company’s strategy, expansion and valuation disconnect. Analysts at H.C. Wainwright praised the progress toward hash rate goals and recommended buying the stock. They cite undervaluation and potential for outsized performance during the BTC bull market.
Bitfarms’ management discussed diversifying revenue with AI ventures and highlighted acquiring a 120 MW facility in Sharon, Pennsylvania. Despite challenges like Riot Blockchain’s (NASDAQ:RIOT) takeover attempt and a CEO transition, many remain optimistic about the company’s future growth profile. As Bitfarms continues to execute and improve its power costs and efficiency this year, this is a stock that could surge to a greater degree than Bitcoin in a bull market environment.
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On the date of publication, Chris MacDonald 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
