7 Underappreciated Penny Stocks That Pack a Wallop

Stocks to buy

Let’s be brutally honest with each other – underappreciated penny stocks are that way for a reason. I’m not going to say they stink but they’re incredibly unpredictable. And in many cases, we’re talking about a binary proposition. Either you’ll win big or you’ll lose badly. Generally speaking, the odds don’t favor the speculator.

Look, if underappreciated penny stocks featured a high chance of becoming much more appreciated down the line, you wouldn’t have high-level warnings from the U.S. Securities and Exchange Commission (SEC) warning you about this arena. From volatility to a lack of proper price discovery down to finding a willing buyer even when you’re profitable “on paper,” these speculative ventures don’t fit for everyone.

Nevertheless, if you’re already going to speculate anyway, the market at least gives you an opportunity for long-term price appreciation. On that note, below are underappreciated penny stocks to put on your radar.

Gevo (GEVO)

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A renewable chemicals and advanced biofuels company, Gevo (NASDAQ:GEVO) offers tremendous relevance to our climate change discussions. According to the company’s Form 10-K, Gevo’s mission centers on solving greenhouse gas emissions for subsectors of the transportation industry that cannot readily adopt electrification or hydrogen-based solutions. As an alternative, the company offers sustainable hydrocarbon fuels.

Fundamentally, Gevo will likely pique curiosity. For example, Credence Research notes that the global renewable hydrocarbon fuel market witnessed steady growth in recent years. Further, analysts believe that the segment could expand at a compound annual growth rate (CAGR) of 8.9% between 2023 and 2030. At the forecast’s culmination, the space could be worth around $639.2 billion.

So, what’s the upside opportunity? GEVO stock trades at 92 cents, translating to a market capitalization of $220.2 million. Basically, the underlying company needs to grab a modest portion of the sector and shares could fly.

Of course, the risk is that the company lost 56% of market value. Still, analysts rate it a moderate buy with a $4.80 price target, projecting 422% upside potential. So, it’s a solid starting point for underappreciated penny stocks.

Eos Energy (EOSE)

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Another example of underappreciated penny stocks that line up with contemporary social trends, Eos Energy (NASDAQ:EOSE) designs, develops, manufactures, and markets innovative zinc-based energy storage solutions. These solutions utility-scale, microgrid and commercial and industrial applications. Additionally, the company’s Form 10-K states that its batteries feature the potential to emerge as a leading alternative to lithium-ion batteries.

Fundamentally, that last point offers an enticing argument. While lithium-ion batteries have become synonymous with advanced technologies, they also have some drawbacks. These disadvantages include relatively higher cost, slightly heavier weight and repair and maintenance challenges. Plus, safety concerns exist regarding their use and deployment. Therefore, an alternative energy solution could help boost EOSE stock.

As far as trailing-one-year performances go, EOSE isn’t too bad, down about 13%. However, Eos did go public via a merger with a blank-check company and that whole arena hasn’t panned out well. Still, EOSE ranks among the few underappreciated penny stocks with a moderate buy rating.

Even better, the average price target lands at $7.67, projecting over 561% growth.

Velo3D (VLD)

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A metal additive manufacturing company, Velo3D (NYSE:VLD) entered the public arena with much anticipation. Like Eos Energy above, Velo3D entered the public domain via a reverse merger with a special purpose acquisition company (SPAC). Unfortunately, SPAC-based investments have badly underperformed. No matter which way you cut it, the severe erosion of value has left many investors shaken.

Still, what gives bold contrarians hope is that the relevance of the underlying market. According to Grand View Research, the additive manufacturing sector reached a valuation of $20.37 billion last year. Further, experts project the ecosystem to expand at a CAGR of 23.3% to 2030. By the end of the forecast period, the additive manufacturing industry may print revenue of $88.28 billion.

Naturally, the aim here is that Velo3D will take a decent bite out of this sector. If so, VLD stock could skyrocket. Its market capitalization sits at under $70 million. Notably, Lake Street’s Jacob Stephan views Velo3D as a “buy” with a $2 target, implying a 641% upside potential. Therefore, it’s one of the underappreciated penny stocks to keep on your watch list.

Knightscope (KSCP)

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Easily one of the most intriguing names among underappreciated penny stocks, Knightscope (NASDAQ:KSCP) is a security camera and robotics company. Designing, building and deploying machines called Autonomous Data Robots, these devices offer myriad security solutions. From monitoring people in malls, parking lots, neighborhoods and other public areas, Knightscope organically addresses the complex post-pandemic threat environment.

As The Wall Street Journal pointed out in early 2022, police departments have lost many officers. Not only that, they’re struggling to find recruits to replace them. Naturally, some of the main concerns center on rising crime rates as well as growing scrutiny of law enforcement. But there was also the dynamic of a tight labor market. Put another way, people could earn income at far less risk to themselves.

Obviously, Knightscope can act as a force-multiplier. Moreover, its robots can help deescalate situations because of what they are. Since robots lack social categorization, they likely won’t inflame underlying sensitivities.

Now, KSCP is risky – I don’t want to lose sight of that. However, Ascendiant’s Edward Woo pegs shares a “buy” with a $4 target, projecting 649% growth.

Microvast (MVST)

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A battery technology company, Microvast (NASDAQ:MVST) has attracted significant attention among participants of underappreciated penny stocks. Per its public profile, the company designs, develops, and manufactures battery components and systems. Primarily, these elements integrate with electric commercial vehicles and utility-scale storage systems. With the broader focus on clean-emission technologies, Microvast could see rising demand.

According to MarketsandMarkets, the global EV battery market reached a valuation of $132.6 billion last year. Analyst projections call for the space to rise to $508.8 billion by 2033. If so, the expansion would translate to a CAGR of 14.4%. Per the research firm, increased awareness about environmental concerns and the wider push for sustainable transportation options have lifted interest in electric vehicles.

To be fair, MVST stock did shed almost 35% during the trailing year. While not particularly encouraging, shares appear to have hit a near-term bottom. Adding to the speculative bullish sentiment, analysts rate shares a unanimous strong buy with an $8 target. That translates to upside potential of 692%.

Quantum Computing (QUBT)

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As you might guess from the name, Quantum Computing (NASDAQ:QUBT) specializes in its namesake innovation. From its website, the company offers full-stack quantum solutions, bringing tomorrow’s technology to customers today. In addition to the technology enterprise’s unique quantum hardware, it provides software solutions and professional services. Fundamentally, the idea here is to secure an early foothold in the burgeoning arena.

According to Fortune Business Insights, the quantum computing market size reached a valuation of $717.3 million in 2022. Further, the space may have grown to $928.8 million last year. However, the big expansion could occur in 2030 when experts anticipate that the ecosystem could see a valuation of about $6.53 billion. If so, that would translate to a CAGR of 32.1% during the forecast period.

Before getting too excited, Quantum has its work cut out for it. With a market capitalization just shy of $57 million, it’s flirting with nano-cap territory ($50 million). However, Edward Woo believes QUBT stock could hit $8.75, which would mean 1,068% growth potential. Therefore, it’s one of the underappreciated penny stocks to consider.

Clene (CLNN)

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Headquartered in Salt Lake City, Utah, Clene (NASDAQ:CLNN) is a clinical-stage pharmaceutical company. Specifically, it pioneers the discovery, development, and commercialization of novel clean-surfaced nanotechnology (CSN) therapeutics. Per the company’s Form 10-K disclosure, Clene’s patent-protected, proprietary position enables the enterprise to potentially develop a broad and deep pipeline to address a wide range of diseases.

Undergirding sentiment for CLNN stock is a growing and exciting field. According to Global Market Insights, the nanotechnology-based drug delivery market reached a valuation of $95.2 billion in 2022. Further, experts in the field anticipate that the sector could expand at a CAGR of 12.6% by 2032. If so, we’re talking about a market value of $308.4 billion.

Similar to the other underappreciated penny stocks, Clene carries a market cap of only $54.3 million. Thus, taking even a modest size of the market could yield substantial growth for CLNN. Analysts also expect greatness, rating shares a unanimous strong buy with a $7 price target. That translates to a stratospheric return of nearly 1,546%.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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