Tijuana… you don’t wanna. Those were the words of my college campus security officer and that’s the attitude investors should take regarding penny stocks. I know – it’s not exactly a ringing endorsement and that’s because it’s not. This sector is extremely risky due to the unpredictable nature of the space.
Nevertheless, speculation is in the human bloodstream. Generation after generation will continue to put at least some capital behind penny stocks. That being the case, investors that are already committed to gambling on high-risk, high-reward ventures should do so smartly. Well, at least as smartly as you can in this environment.
Admittedly, while penny stocks carry tremendous risks, if the stars happen to align in your favor, the rewards can be massive, if not outright lifechanging. Again, that’s not an endorsement of these ideas or any speculative venture. Rather, the possibility of blistering upside keeps retail investors walking through the doors.
If that’s you, these penny stocks just might fit the billing.
Quantum Computing (QUBT)
Based on the company name alone, you can understand why Quantum Computing (NASDAQ:QUBT) ranks among the penny stocks to consider. Based in Hoboken, New Jersey, Quantum is an integrated photonics company that offers accessible and affordable quantum machines. Fundamentally, the underlying sector could create trillions of dollars’ worth of value within the next decade, per McKinsey & Company.
While going through the granularity runs beyond the scope of this article, quantum computing represents an entirely different paradigm shift. Basically, quantum computers is akin to a multilane highway, enabling myriad simultaneous functionalities. Classic computers simply can’t keep pace with the upside potential of their quantum counterparts, which makes QUBT so intriguing.
Presently, Ascendiant’s Edward Woo rates QUBT a “buy” with an $8.25 price target. That implies a growth potential of 1,113.24%. That would be simply mind-blowing if the target came to fruition.
For fiscal 2024, Woo is targeting a $1 million sales haul. If so, that would be a country mile ahead of 2023’s tally of only $360,000. For the massive potential, QUBT is one of the penny stocks to put on your radar.
Knightscope (KSCP)
I’ve long discussed Knightscope (NASDAQ:KSCP) for multiple publishing agencies and I still think it’s promising. Headquartered in Mountain View, California, Knightscope falls under the security and protection services industry. It mainly specializes in what it calls autonomous security robots or ASRs. Through the integration of various sensors and lasers along with advanced algorithms, ASRs patrol assigned campuses and facilities. Their job is to provide first-line patrol and security.
What makes ASRs so compelling is that they’re not humans. Yeah, I know that sounds like an obvious statement but here’s the thing. During the various social tensions that erupted during the Covid-19 crisis, conflicts occurred between the side of security forces and law enforcement and the broader community. With ASRs, enterprises and agencies can skip over these social undercurrents and address problems in a less-confrontational manner.
I can go on and on. Financially, the issue with KSCP is that during the trailing 12 months (TTM), it lost $27.27 million on revenue of $12.15 million. However, analysts believe that following a down year in fiscal 2024, Knightscope can make a recovery in fiscal 2025, hitting $17 million in sales. That would be up 41.7% from projected 2024 revenue. KSCP could be one of the penny stocks to consider.
BuzzFeed (BZFD)
Operating out of New York City, BuzzFeed (NASDAQ:BZFD) falls under the Internet content and information space. Per its corporate profile, BuzzFeed is a digital media company, distributing content across its platforms along with third-party variants. It used to be one of the most popular digital brands. However, a series of headwinds have hurt the enterprise.
To be blunt, BZFD ranks among the wildest of penny stocks. Since making its public market debut, shares have dropped about 94% of equity value. In addition, the company also aroused headlines, although probably not for the reason it would have wanted. Ex-presidential candidate Vivek Ramaswamy bought up a huge load of BZFD stock in an activist campaign.
It’s hard to say what would come of the effort. However, from a pure investment standpoint, it did get people talking about the enterprise. On a year-to-date basis, shares gained over 122%.
Now, one of the major problems with the company is that the top line has eroded since 2021. Last year, the company posted sales of $252.7 million, down 26.2% from 2022. However, analysts are targeting a gradually recovery, with sales potentially reaching $336.8 million in fiscal 2024.
It could get interesting if you’re seeking high-risk, high-reward penny stocks.
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.