If you’re interested in investing in penny stocks, making educated investment decisions is essential. After all, penny stocks are riddled with risk. These stocks typically represent companies that are either new, unprofitable, or simply don’t have a proven model quite yet.
There’s no magic strategy for picking winning penny stocks. If you invest in this category, there’s a high likelihood that some of the stocks you invest in will ultimately fail. However, one way to increase your chances of success with penny stocks is to lean on analysts.
When analysts share their opinions, they typically predict the earnings they expect the companies they analyze to earn. By looking at those predictions, you can find stocks that analysts believe will see meaningful growth in earnings. And growth in earnings means that these companies are expected to realize at least some level of success.
Find a few stocks below that analysts expect will grow earnings by 100% or more in the year ahead.
Key Points:
- Penny stocks can be risky, but they can also be lucrative investment opportunities.
- Paying attention to analyst opinions can shed light on the penny stocks that have the most growth potential.
- Analysts expect ATRenew and Vasta Platforms to go from losses to earnings this year, setting the stage for potentially significant growth.
- Are you looking for stocks to buy low and sell high? Learn about two low-cost stocks we believe will climb by 10X or more in our new Discover “The Next NVIDIA” report.
ATRenew May Go From Losses to Profits
There’s a booming secondary market for electronics. I haven’t purchased a new cell phone in over six years. I don’t see a reason to do so when last year’s version is available online for less than half the price of the new versions. And I’m not the only person who bargain shops when looking for electronics. ATRenew (NYSE: RERE) is a Chinese company that aims to capitalize on the secondary electronics market.
The company is an electronics recycling business that operates three arms. The first part of the business is a consumer-to-business service in which consumers can sell their used electronics to businesses that may be interested in the components contained within those electronics. The second is a business-to-business platform centered around trading used consumer electronics. Finally, the company has a marketplace where consumers can find high-quality used electronics for low prices.
That business model seems to be proving effective. Last year, the company only lost about $0.09 per share, down from a loss of $1.47 in the year before. But analysts expect the company to produce profits this year. In fact, earnings are expected to come in at $1.76 per share for the full year, representing tremendous growth from its 2023 performance. The median price target on the stock is $22.57 per share — more than nine times the current price of the stock.
Vasta Platform Expected to Move Into Profitability This Year, Too
Education is big business. The global education market is expected to grow to be worth $10 trillion by 2030. As the education industry grows, companies like Vasta Platform (Nasdaq: VSTA) are seeing opportunities.
Vasta Platform is a Brazilian company that’s focused on improving the education system in Brazil and around the world. The company is divided into two different categories, including:
- Educational Materials: Vasta Platform offers both digital and printed educational materials. These include exercise books, multidisciplinary subject books, student evaluations, textbooks, and teacher handbooks. The company’s biggest buyers of educational materials are private K-12 schools.
- PAR Platform: Vasta Platform also offers the PAR platform. This platform allows schools to choose the educational materials they’ll use in their classroom based on what works best for their teaching methods. The platform also makes it possible to manage materials across multiple schools so that all schools under a single brand are in sync in terms of what they’re teaching.
Ultimately, these services are centered around the company’s goal of helping private K-12 schools become more profitable through a digital transformation.
While Vasta Platform produced a loss last year, analysts expect the company to become profitable this year. Averages among five analysts weighing in on the stock point to the company producing $1.74 in earnings in 2024. The median target price currently sits at $20.45 per share. That’s nearly eight times the company’s current share price.
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