Meme stocks – just mentioning the concept might cause eyes to roll. And that to be fair is a natural reaction. We’re all too familiar with the highly speculative ideas that scream higher, only to leave those with FOMO (or the fear of missing out) holding the bag.
That’s not to say that the ideas presented below are not speculative; indeed, I would classify them all as high-risk, high-reward ventures. However, these companies go beyond wagering on financially vulnerable cineplex operators or video game retailers. Instead, these companies cover a wide range of innovative sectors, from artificial intelligence to the burgeoning space economy.
What’s more, at time of writing, all the securities mentioned in this write-up feature strong buy ratings from Wall Street analysts. That by itself isn’t a guarantee of upside. However, it’s always nice to know that the smartest folks in the room support your investment thesis. With that in mind, below are top meme stocks to consider.
SoundHound AI (SOUN)
A voice AI and speech recognition company, SoundHound AI (NASDAQ:SOUN) is easily one of the most popular meme stocks to consider. Through its ability to foster connections between man and machine, SoundHound features relevance in several sectors: automotive, Internet of Things, and customer service among many other fields.
Having said that, SOUN stock carries a ridiculously hot multiple of 21.93X. Some might question whether such a valuation is sustainable. However, it should be noted that in the past year, the average price-to-sales ratio came in at 19.71X. Further, during the first quarter, the metric soared to 29.44X. Therefore, SoundHound may have a high ceiling to expand to.
Here’s the other thing: analysts are projecting significant growth in the years ahead. Fiscal 2024 revenue could hit $70.51 million, which would be a lift of 53.7% from last year’s tally of 45.87 million. In the following year, the top line could expand to $103.5 million.
Assuming a shares outstanding count of 296.44 million, SOUN stock is currently trading at 12.78X projected 2025 sales. That’s looking more attractive, making it one of the meme stocks to keep on your watchlist.
Enovix (ENVX)
Operating in the industrial sector, Enovix (NASDAQ:ENVX) focuses on electrical equipment and parts. Per its public profile, the company designs, develops and manufactures lithium-ion batteries. Primarily, it serves wearable consumer devices and products integrated with IoT. In addition, it brings solutions to smartphone, laptop and tablet manufacturers.
As a popular and relevant enterprise, Enovix commands a screaming high multiple. At first glance, it seems utterly preposterous: a price-to-sales ratio of 106.49. Some context is necessary. In the past year, the metric averaged 181.15X. Also, during Q2, the statistic averaged just over 195X. In that sense, ENVX is “undervalued.”
Here’s what investors need to know. By the end of the current fiscal year, analyst anticipate that revenue could hit $20.8 million. If so, that’s up a stunning 172.1% from last year’s print of $7.64 million. By the end of fiscal 2025, revenue could hit $55.09 million, up nearly 165% from projected 2024 sales. Also, the high-side estimate calls for $62 million.
Assuming a shares outstanding count of 176.28 million, Enovix is trading hands at 30.22X high-side 2025 sales. That’s still blisteringly hot but at least it’s within the boundaries of realism. Thus, it’s one of the speculative meme stocks to consider.
Intuitive Machines (LUNR)
One of the most exciting ideas among meme stocks, Intuitive Machines (NASDAQ:LUNR) is also among the riskiest. Billed as a space exploration firm, Intuitive specializes in providing lunar surface access. It also brings to the table lunar orbit delivery and communication services. With a new space race upon us, LUNR stock has gained over 48% since the start of the year.
Even with the strong performance, Intuitive is modestly priced: only 0.8X trailing-year revenue. What makes this stat even more compelling is that in the prior year, the multiple stood at 1.3X on average. Further, during Q1, the average had shot up to 2.01X. Back in Q1 of 2023, the valuation was even richer at 2.49X.
Speculators will be focusing on what happens over the next several months. By the end of fiscal 2024, revenue could clock in at 228.35 million. If so, that would be up 187.2%. By fiscal 2025, sales could soar again to $392.45 million.
Assuming a shares outstanding count of 58.52 million, LUNR stock is trading at 0.52X high-side 2025 revenue. It’s an extremely tempting proposition.
On the date of publication, Josh Enomoto did not have (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.
