3 Stocks Under $5 That Wall Street Thinks Will Grow 20%

By Trey Thoelcke Published Feb 14, 11:56AM EST

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3 Stocks Under $5 That Wall Street Thinks Will Grow 20% — © ipopba / Getty Images

Many investors, especially more aggressive traders, look at lower-priced stocks with growth prospects 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. Then you can always sell half and keep half.

We screened our 24/7 Wall St. equity research database, looking for companies with inexpensive stocks as well as projected per-share earnings growth of 20% or more in the next three to five years. We found three that fit the bill perfectly.

Blend Labs

Cloud-based financial services

Stock: Blend Labs Inc. (NYSE: BLND)
Recent closing share price: $2.86
3-5 year expected EPS growth rate: 20%

This is a San Francisco-based provider of cloud-based software solutions for financial services firms in the United States. For instance, its soft credit pull feature enables lenders to reduce the costs associated with the early stages of the mortgage origination process, and Blend Labs announced last month that it now supports Fannie Mae’s Desktop Underwriter.

Since the company’s third-quarter report back in November, Blend Labs shares have risen about 97%. The S&P 500 has gained about 15% in that time. The stock is up almost 14% year to date. Note though that the stock has overrun the analysts’ consensus price target, and the company’s founder and chief executive has been selling shares for the past three months.

IHS

Communications infrastructure for the developing world

Stock: IHS Holding Ltd. (NYSE: IHS)
Recent closing share price: $3.39
3-5 year expected EPS growth rate: 23.5%

This London-based company is one of the largest telecommunications infrastructure providers in Africa, Latin America, and the Middle East. The company recently announced that it will boost broadband connectivity in Nigeria, as well as steps it will take to enhance its own corporate governance. The current board includes former Florida Governor Jeb Bush and former Xerox CEO Ursula Burns.

The share price is more than 26% lower year to date, though it has recovered a bit from a post-IPO low of $2.46 seen earlier this month. Analysts see plenty of room for the stock to run, though. Hitting their consensus price target of $11.45 would be a gain of around 238% in the next 12 months. Their consensus recommendation is to buy shares.

Ribbon Communications

Providing IP and networking solutions

Stock: Ribbon Communications Inc. (NYSE: RBBN)
Recent closing share price: $3.14
3-5 year expected EPS growth rate: 20%

This Texas-based telecommunications services provider was founded in 2017 following a merger. It was named last year by Newsweek as one of America’s most responsible companies. And Ribbon recently announced agreements to provide services to American Electric Power and to BroadSource.

The stock is up more than 8% since the beginning of the year, but note that it has a fairly wide 52-week trading range of $1.78 to $4.84 per share. In fact, it is almost 11% lower year over year. However, the $5.50 consensus price target indicates that analysts on average anticipate over 75% upside in the coming year. They recommend buying shares, with half of the analysts having Strong Buy equivalent ratings.

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.