Aditi Ganguly
·4 min read
Penny stocks are risky but have the potential to triple initial investments.
While risk-averse investors might associate penny stocks with gambling, conducting proper research and noting market sentiment regarding such low-value stocks can help traders identify strategic investment opportunities.
But pump-and-dump schemes where market-makers artificially inflate the price of penny stocks through advertising are fairly common. While the promoters often end up cold calling clients or sending email blasts, renowned research firms assign recommendations and price targets after conducting comprehensive fundamental research and market analysis.
Penny stocks trading on stock exchanges also are required to follow extensive regulations and comply with periodic audits, making them relatively more secure than obscure over-the-counter pink sheets.
As the global economy enters recovery, thriving market conditions and rejuvenated optimism should allow emerging companies to grow substantially. According to renowned market analysts, some of the most promising penny stocks include:
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Nkarta: Up To 545% Upside
Nkarta Inc. (NASDAQ:NKTX), a San Francisco-based clinical-stage biotech company, recently made headlines after its allogeneic cell therapy drug candidate, designed to treat lupus, received clearance from the U.S. Food and Drug Administration.
"The clearance of Nkarta's IND for NKX019 in lupus nephritis is an important achievement for Nkarta, and we feel NK cell therapy is ideally suited for the treatment of autoimmune disease," Nkarta President and CEO Paul J. Hastings said in a press release. "Nkarta is well-capitalized with runway that extends into 2026 and beyond key data readouts across the three programs."
Independent research firm Needham & Co. predicts Nkarta's shares will hit $15, indicating a potential upside of over 546%. Investment bank Raymond James, which has nearly $1.3 trillion in assets under management, has a price target of $13 on the biotech penny stock, reflecting a potential upside of over 460%. New York-based H.C. Wainwright & Co., one of the country's oldest and most prominent investment banks, maintains a price target of $10 on Nkarta, indicating a potential upside of more than 330%.
ChargePoint Holdings: Up To 315% Upside
The booming demand for electric vehicles (EVs) has paved the way for charging network and solutions providers like ChargePoint Holdings Inc. (NYSE:CHPT) to gain momentum. As the global automotive industry goes electric, the demand for AC and DC charging networks is ramping up.
ChargePoint Holdings unveiled a fast-charging alternative designed for Tesla Inc., the most popular EV on the market, last week. The company forecasts it will achieve profitability as early as next year. It reiterated its plans to generate positive non-generally accepted accounting principles (GAAP) adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter of 2024 in its last earnings release.
Unsurprisingly, analysts expect ChargePoint stock to surge in the near term. Investment bank Oppenheimer Holdings Inc., which manages over $35 billion in assets, has an Outperform rating on ChargePoint Holdings, with a price target of $13. This indicates a 315.4% potential upside for ChargePoint stock.
Plug Power: Up To 310% Upside
Plug Power Inc. (NASDAQ:PLUG) is an up-and-coming player in the clean energy sector that's building an end-to-end green hydrogen ecosystem. The company is the largest buyer of liquid hydrogen in the world and plans to build a "green hydrogen highway" across North America and Europe.
Plug Power aims to produce and supply approximately 500 tonnes of liquid hydrogen by 2025. The company stands to benefit from President Joe Biden's latest $7 billion grant to hydrogen hubs, as the U.S. aims to achieve a net zero emission rate by 2050.
Plug Power estimates its revenue will grow from $1.2 billion in fiscal 2023 to $6 billion by 2027 and $20 billion by 2030. This indicates a compounded annual growth rate of 35% from 2023 to 2030.
Wainwright has a Buy rating on Plug Power stock with a price target of $27, indicating a 314% potential upside. Morgan Stanley, on the other hand, has an Equal Weight rating on the hydrogen producer, with a price target of $9. This reflects a nearly 40% potential upside from its current price.
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This article Want To Invest In Penny Stocks? Here Are Three That Analysts Think Could Deliver Over 300% Returns originally appeared on Benzinga.com
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