Investing
5 Former Sizzling IPOs That Are Buy-Rated and Trading Under $10
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While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.
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Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
Skeptics of low-priced shares should remember that at one point Amazon, Apple and Netflix traded in the single digits. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured last March, has tripled since then.
We screened our 24/7 Wall St. research database looking for smaller cap companies that could offer patient investors some huge returns for 2023 and beyond. While these five stocks are rated Buy and have a ton of Wall Street coverage, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Lulu’s Fashion Lounge
This small-cap online retailer blew out the fourth quarter but has backed up big as concerns over consumer spending grow. Lulu’s Fashion Lounge Holdings Inc. (NASDAQ: LVLU) is a retailer of women’s apparel targeting millennial and Gen Z customers. It specializes in occasion dresses but also offers broader categories, including formal, bridal, lounge, vacation and basics.
The company remains focused on growing its market base and has an analytics-driven inventory control that keeps the products being offered fresh. The stock has been eviscerated as the spiraling inflation numbers have hurt many retailers, but Lulu’s Fashion Lounge is solidly profitable and looks to grow revenue and earnings this year.
Goldman Sachs has set a $4.30 price target on Lulu’s Fashion Lounge stock. Analysts have a consensus target of $4.64, and the stock closed on Friday at $2.32.
24/7 Wall St.Palantir
Started by Silicon Valley legend Peter Thiel, this company may offer the largest upside potential of all the stocks in this group, and it is also a takeover candidate. Palantir Technologies Inc. (NYSE: PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.
Palantir Gotham is the company’s software platform for government operatives in the defense and intelligence sectors that enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.
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The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data, and it allows individual users to integrate and analyze the data they need in one place.
Raymond James has a Strong Buy rating and its $15 target price is a Wall Street high. The consensus target for Palantir Technologies stock is $9.01, and shares closed on Friday at $7.88.
24/7 Wall St.Robinhood
This stock was the birthplace for a large part of the meme stock revolution and has continued to attract big trading volume. Robinhood Markets Inc. (NASDAQ: HOOD) operates a financial services platform in the United States that allows users to invest in stocks, exchange-traded funds ETFs), options, gold and cryptocurrencies.
The company also offers various learning and education solutions. Snacks is a digest of business news stories; Learn is a collection of approximately 650 articles, including guides, feature tutorials and a financial dictionary; Newsfeeds offers access to free premium news from various sites, such as Barron’s, Reuters and The Wall Street Journal; and Lists allow users to create custom watchlists to monitor securities, ETFs and cryptocurrencies, as well as cash management services.
The $25 JMP Securities price target is well above the consensus target of $11.94. Robinhood Markets stock closed at $9.19 on Friday.
SoFi Technologies
This company took the SPAC route for its IPO and remains a millennial trader favorite. SoFi Technologies Inc. (NASDAQ: SOFI) provides digital financial services that allow its members to borrow, save, spend, invest and protect their money. The company offers student loans; personal loans for debt consolidation and home improvement projects; and home loans.
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SoFi also provides cash management, investment and other related services. In addition, it operates Galileo, a technology platform that offers services to financial and non-financial institutions, and Apex, a technology-enabled platform that provides investment custody and clearing brokerage services.
SoFi Technologies stock has a $9 price target at Mizuho. The consensus target is $9.01, and the stock closed on Friday at $5.46.
24/7 Wall St.Under Armour
The sports apparel stock has been crushed and looks like a solid bargain. Under Armour Inc. (NYSE: UAA) engages in the developing, marketing and distributing performance apparel, footwear and accessories for men, women and youth. The company offers its apparel in compression, fitted and loose-fit types.
The company also provides footwear products for running, training, basketball, cleated sports, recovery and outdoor applications. The company’s accessories include gloves, bags, headwear and sports masks, and it offers and digital subscription and advertising services under the MapMyRun and MapMyRide platforms.
Under Armor primarily offers its products under the Under Armor, UA, HeatGear, ColdGear, HOVR, Protect This House, I Will, UA Logo, Armour Fleece and Armour Bra brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors and directly to consumers through a network of 422 brand and factory house stores, as well as through e-commerce websites.
The $13.50 Redburn Partners target price compares with a $12.63 consensus target and the $8.63 closing share price for Under Armour stock on Friday.
These are five stocks for aggressive investors looking to get share count leverage on companies that have sizable upside potential. While not suited for all investors, they are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage.
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