Investing

3 Penny Stocks With 458% Average Upside According to Wall Street Analysts

Gerelyn Terzo

Published: June 24, 2024 10:21 am

Investors might be intrigued by penny stocks because they are so cheap to own. By investing $100 into a stock that trades for $0.50, you can own 200 shares of a company in your portfolio. However, even if you have a limited amount to invest, penny stocks aren’t your only option. You could own a piece of the hottest stock in technology right now, Nvidia (Nasdaq: NVDA) if you wanted to.

Most brokers support fractional share ownership, paving the way for investors to own pieces of larger, more established companies even if the stock price is on the higher side. Instead of investing based on the number of shares, you base your investment on a dollar amount, as a result of which you could own entire shares or fractions of a share.

If investors are going to buy penny stocks anyway, they should do so with their eyes wide open. It’s important not to lose sight of why these stocks are so cheap. Most of them don’t pay dividends, and many aren’t even profitable. Nevertheless, for investors wiling to throw caution to the wind, we’ve identified three stocks that have an average upside potential of 458% according to Wall Street analyst estimates.

1.) KULR Technology Group: 1,059% Upside Potential

KULR Technology Group (NYSEAM: KULR), which specializes in energy storage solutions and has a market cap of $60.9 million, trades for $0.3449 per share. KULR is involved in the energy transition to more sustainable power sources.

The stock has advanced nearly 80% year-to-date. The few Wall Street analysts that cover the stock are bullish , with an average price target of $4 per share. Based on those estimates and the current share price, this penny stock has upside potential of over 1,000%. KULR has traded in a 52-week range of $0.1000 and $1.1000.

While investors might not receive dividend checks in the mail just yet, KULR is focused on shareholder value. KULR CEO Michael Mo voluntarily requested a lower compensation package to make more room for shareholder value creation, a proposal that the company’s board of directors gave the green light to. As a result, Mo will see a 33% decline in the cash component of his pay in exchange for an equity incentive grant that vests in 12 months. As a result, his salary is now more directly aligned with KULR stock performance, suggesting Mo is as bullish as Wall Street.

The company has been focused on becoming a more lean machine, cutting costs where possible, including operating and investment cash consumption as it strives to grow and become a profitable entity. In Q1, KULR reported revenue of $1.75 million, almost flat with year-ago performance. Contract service revenue saw a big leap of 769% year-over-year to $1.13 million.

Remember most penny stocks aren’t profitable, including KULR. The company reported a Q1 operating loss of $4.66 million, down from $6.26 million in the year-ago quarter fueled by lower SG&A expenses and R&D investments. Management acknowledged “revenue challenges” and maintains that demand for its products remains intact.

2.) Assertio Holdings: 160% Upside Potential

Assertio Holdings (NasdaqCM: ASRT) trades at $1.15 per share, in the middle of its 52-week range, for a market cap of $111.2 million. Wall Street analysts have a price target of $3 on Assertio stock, reflecting potential upside of 160% for this penny stock. Lake Street analyst Thomas Flaten recently lowered his price target from $4 to $3 per share with a “buy” rating.

Assertio Holdings is a pharmaceutical company that recently appointed a new CEO, Brendan P. O’Grady, a seasoned healthcare executive. O’Grady replaced Dan Peisert, who resigned in early 2024 while Heather Mason served in an interim capacity since then.

Mason said on the Q1 earnings call that the company was not satisfied with the performance of the share price but that management’s strategy remains on diversifying revenue streams and growing cash flow to achieve better top line and bottom line growth.

In Q1, Assertio reported adjusted EBITDA of $7.4 million, up from $4.5 million in Q4, owing to lower SG&A expenses. But on a GAAP net income basis, the company reported a Q1 loss of $4.5 million, narrowed from $57.4 million in Q4.

Assertio also stuck to its full-year guidance of between $110 million and $125 million in net product sales as well as adjusted EBITDA in the range of $20 million-$30 million. The company has $80.7 million of cash and cash equivalents on its balance sheet.

3.) Babcock & Wilcock Enterprises: 157% Upside Potential

Babcock & Wilcock Enterprises (NYSE: BW), which develops clean power production technologies, trades at $1.65 per share, for a market cap of $147.9 million. This stock is also a play on the energy transition toward more sustainable sources with net-zero ambitions.

Wall Street analysts are convinced BW shares should be trading closer to $4.25 per share, reflecting 157% upside potential on the stock, similar to ASRT. Babcock & Wilcock has traded in a 52-week range of $0.75-$6.58. The high end of the range was reached last summer around the time it secured a contract with NorthStar Clean Energy to perform a engineering study on converting a coal-powered plant into into one retrofitted for biomass fuel.

In Q1, Babcock & Wilcock reported a revenue decline, owing to a focus on higher-margin projects, while its net loss widened from $12.7 million to $15.8 million year-over-year. Management says they’re experiencing strong demand alongside a “$9 billion global pipeline of identified project opportunities” to book over the course of the next three years.

Disclaimer: 24/7 Wall Street does not recommend the penny stocks above nor do they have an interest or ownership in the stocks.