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Have you considered investing in penny stocks ? While they are risky, they can also produce meaningful returns. That is, as long as you make the right picks.
Penny stocks represent small publicly traded companies and trade for under $5 per share. The goal is to buy into these companies when they’re small and earn a return as they grow.
One way to decide which penny stocks have strong growth potential is to look to analysts. In particular, it’s a good idea to see whether or not analysts expect these companies to increase earnings . Below, we’ve outlined four penny stocks that analyst say can grow their earnings by 1,100% or more this year.
Key Points:
- While penny stocks are high-risk investments, they have the potential to produce meaningful returns if you make wise investment decisions.
- GHG, VSTA, AIRS, and ULCC are all expected to grow earnings by more than 1,100% this year.
- Check out this report to learn about another opportunity to produce significant returns with a stock that could become the next NVIDIA.
Why You Should Trade Penny Stocks With Caution
Investing in young companies can produce meaningful gains. But it’s also a risky proposition. These companies typically don’t have a proven track record of generating profits, and many of them haven’t started the commercialization process yet. So there’s a high probability of failure. In fact, only about one in every 1,000 penny stocks will grow to become a successful mid-cap or large-cap company. As such, it’s important to make your picks wisely and limit your exposure to these high-risk, high-reward investment opportunities.
4 Penny Stocks That Could Grow Earnings Over 1,100% This Year GreenTree Hospitality Group
GreenTree Hospitality Group (NYSE: GHG) is a hospitality company that franchises and manages hotels across China under the GreenTree Inn brand. Moreover, it's worth noting that the company has produced profits in six of the seven years it has been around.
In 2023, EPS came in at $0.37 for the full year, but the one analyst weighing in on the stock expects significant growth in this metric in 2024. That analyst says earnings per share should come in at around $3.75 for the full year. If that’s the case, it will represent more than 913% growth in earnings this year.
The analyst weighing in on the stock also rates it a Hold and gave it a $30.36 price target, suggesting the stock could climb more than 1,100% in the next year.
Vasta Platform
Vasta Platform (Nasdaq: VSTA) is a Brazilian education company that was founded in 1966. The company has two segments. The first of those segments offers educational content like textbooks, curriculums, and more. The second segment is designed to bring partner schools together under a single digital platform.
Unfortunately, the company hasn’t been profitable. For the past four years, Vasta Platform has operated at a loss. But if analysts are correct, that will change this year. Five analysts are currently covering the stock, and between them, they expect the company to produce $1.74 in earnings per share this year.
It’s worth noting that, while the average among analysts suggests this will be a profitable year for the company, they don’t all have positive opinions. Of the five analysts weighing in on the stock, two rate it an Outperform, one rates it a Hold, one rates it an Underperform, and one rates it a Sell. Nonetheless, with a median price target of $20.45, there’s potential for meaningful growth ahead.
AirSculpt Technologies
AirSculpt Technologies (Nasdaq: AIRS) is an American company that was founded in 2012 and operates in the cosmetic technology industry. The company’s claim to fame is its AirSculpt product, a technology designed for body contouring procedures. The company’s patented technology is designed to remove fat cells on a one-by-one basis.
While AirSculpt Technologies hasn’t generated any profits over the past several years, analysts expect that to change in 2024. Three analysts currently cover the stock, and between them, they expect the company to generate $0.43 per share in earnings this year.
While the potential move from losses to profits is exciting, the ratings on the stock aren’t quite as robust. All three analysts rate the stock a Hold. But, with an average price target of $5 per share, analysts suggest that there’s potential for more than 10% gains in the next 12 months.
Frontier Group
Frontier Group (Nasdaq: ULCC) is an American holding company that owns and operates Frontier Airlines, a discount airline provider that offers flights in the continental United States and to some international destinations.
Unfortunately, the company hasn’t been profitable for the past four years, a fact that was only exacerbated by the COVID-19 pandemic. Nonetheless, according to the 12 analysts weighing in on the stock, it could achieve profitability this year. Analysts expect earnings per share to come in at $0.30 in 2024.
It’s worth noting that nine of the 12 analysts weighing in on the stock rate it a Hold. While there is one Outperform rating, there are also two Underperform ratings. But with a $6 median price target, analysts suggest there’s room for meaningful growth ahead.
Final Thoughts
Penny stocks are typically high-risk investments. But if you choose the right picks, there’s opportunity for meaningful returns. According to analysts, all four stocks mentioned above have the potential to produce meaningful earnings growth that could set them on the path to success in 2024. If you want to hear about another stock that has the potential to produce significant returns, check out this report on what could be the next NVIDIA .
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