3 Penny Stocks Wall Street Thinks Are Undervalued
Penny stocks. Perhaps more than ever, it makes sense to avoid low-priced, small-cap, and under-followed companies.
But as with any market, some penny stocks are currying favor on Wall Street, and not just meme-trading monkeys. And today, a few of these names might even fit your wallet.
Skyrocketing inflation. Aggressive interest rate hikes. The supply chain grunts that apparently won’t go away. Welcome to 2022. And in a market environment where many large caps have shrunk to mid- or even lower valuations, the reputation of penny stocks is not about to be reinvented into something more substantial. Some, however, stand out from the others.
Despite the long-standing bad reputation and that compounded by the rise of gambling meme traders last year, let’s explore three penny stocks that are well regarded by analysts, rather than “mentions” by Chatty Chuckies on Reddit’s r/WallStreetBets and sports promising profit potential for buyers right now.
Agrify Corp (AGFY)
Click to enlargeAgrify Corp (NASDAQ:AGFY) is the first of our penny stocks that Wall Street is bullish on and ready to buy today.
AGFY stock is a $67 million cannabis coin whose technology solutions are aimed at helping growers grow marijuana and hemp. And business boomed with revenue soaring more than 270% year-over-year to nearly $79 million.
Three out of four surveyed on Wall Street maintain a “buy” rating on AGFY shares with an average price target of $9.25.
As with most penny stocks, AGFY is not profitable. But given its growing revenue and low 0.72 sales ratio, along with a stock price below $3.00, less than half book value and offering more than 200 % upside based on street predictions, there’s a lot to like.
Right now, the growing profits of this penny stock look even more attractive. Technically, AGFY shares are trading in a tight multi-week consolidation from all-time lows and are poised for an uptrend shift on a break above $3.00.
Click to enlargeRenalytix (NASDAQ:RNLX) is the next of our penny stocks that has caught the eye of Wall Street favorably and whose stocks look set to generate profits for investors.
RNLX stock is another buy based on four analyst recommendations. If we are to trust the guidance and a low price target of $8 per share, a return of almost 200% is possible. At the same time and if captured, an average price target of $20.20 would return over 500%!
So what’s behind the rosy forecast? RNLX stock is a $150 million health game whose AI-based diagnostic products are at the center of finding solutions to kidney disease. Additionally, quarterly sales have smartly increased by more than 110% over the past year.
This penny stock certainly looks promising, but Renalytix has its work cut out for it. Red ink and very modest revenues of less than $2.5 million last year are sure proof. Pleasantly though, you have to start somewhere, right?
Additionally, and with downtrend resistance broken last month, a favorable stochastic setup, and stocks pulled 87% off last May’s all-time high, “some” of what Wall Street likes about this penny stock, could finally worth buying.
Click to enlargeCuriosityStream (NASDAQ:CURI) is our latest penny stock that has found Wall Street lending its stamp of approval and now worthy of buying decisions in investors’ portfolios.
The $85 million educational streaming service company has sell-side coverage from seven analysts. Four buys and one strong buy, an average price target of $5.19 and a high range of $10.00 indicate that investors would be wise to connect to CURI stocks with shares at $1.86.
With a sales multiple of nearly 1.0x and quarterly year-over-year revenue growth of 77% and a price-to-book ratio of just 0.58, listening to what Wall Street has to say about this penny stock also has more bottom support.
The price chart also finally agrees that investors are able to buy CURI shares with less risk of being schooled. Today, shares of this briefly hyped SPAC are 92% off last February’s all-time high of $24 and just 40 cents off the penny stock’s all-time low.
And technically, with investors using a stochastic signal and a trendline breakout to their advantage for the second time since March, it’s a much nicer time to be positive on CURI shares alongside Wall Street.
On Penny Stocks and Low-Volume Stocks: With rare exceptions, InvestorPlace does not publish commentary on companies with a market capitalization of less than $100 million or trading fewer than 100,000 shares per day. This is because these “penny stocks” are often the playground of scammers and market manipulators. If we ever post commentary on a low-volume stock that could be affected by our commentary, we require the editors of InvestorPlace.com to disclose that fact and warn readers of the risks.
Read more: Penny Stocks – How to profit without getting scammed
As of the date of publication, Chris Tyler had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.