What is it about stocks under $5 that fascinates investors? Part of it, for sure, is the allure of finding the next Amazon.com Inc. (NASDAQ: AMZN) or Apple Inc. (NASDAQ: AAPL). At one point, these were low-priced stocks, and today they are two of the largest stocks by market capitalization. Investors who had the foresight - and the patience - to buy-and-hold these stocks over 20 years ago are sitting on massive profits.
Another appealing aspect of stocks under $5 is that they allow investors to take a sizable position in a stock without having to put in a lot of their own money. For example, investing $500 into a company's stock that is trading for $2.50 per share will get you 200 shares.
In this special presentation, we're looking at seven stocks with a stock price under $5 as of September 11, 2024. If you have some room in your portfolio for speculative stocks that could offer tremendous gains, consider these names.
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- Petco Health & Wellness
- Archer Aviation
- Evolv Technologies
- Uranium Energy
- Curaleaf
- Opendoor Technologies
- B2Gold
#1 - Petco Health & Wellness (NASDAQ:WOOF)
One reason why investors ignore stocks under $5 is that many are those of small-cap stocks that are not yet profitable. These stocks typically underperform in times of rising interest rates because they must borrow to grow. However, with interest rates expected to come down, these stocks may benefit. Petco Health & Wellness Company Inc. (NASDAQ: WOOF) is a good example.
The company’s revenue is flat year-over-year, which coincides with continued consumer spending in the U.S. pet industry. Negative earnings have contributed to WOOF stock being down 37% in the last 12 months. However, in the 30 days ending September 10, 2024, the stock is up 31.7%.
That tracks with new analyst price targets, including one from from Wedbush, which has reiterated its Outperform rating and $5 price target for the stock - a 25% increase. And it should be noted that short interest in Petco stock is over 30%, which could make it a candidate for a short squeeze.
About Petco Health and Wellness
Petco Health and Wellness Company, Inc, operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics.
Read More - Current Price
- $4.65
- Consensus Rating
- Hold
- Ratings Breakdown
- 4 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $3.45 (25.9% Downside)
#2 - Archer Aviation (NYSE:ACHR)
Investors looking for the next big thing have been putting money into companies that make electric vertical take-off and landing (eVTOL) aircraft, colloquially known as flying cars. Archer Aviation Inc. (NYSE: ACHR) is one of the most significant names in this space right now.
The bullish case for flying cars is evident in the use cases, which include shuttling passengers from airports to major cities and transporting first responders to accident scenes that are impossible to reach by ground transport. The market is expected to grow from $5.41 billion in 2021 to $23.21 billion in 2028.
Archer’s flagship Midnight eVTOL is well on its way to getting full FCC approval for commercial operations in 2025. In the meantime, it’s already delivered its first Midnight to the U.S. Air Force as part of its AFWERX Agility Prime contract.
Archer is not yet profitable. However, analysts project 169.5% upside in ACHR stock in the next 12 months.
About Archer Aviation
Archer Aviation Inc, together with its subsidiaries, engages in designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc The company is headquartered in San Jose, California.
- Current Price
- $3.06
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $9.00 (194.1% Upside)
#3 - Evolv Technologies (NASDAQ:EVLV)
Investors looking for a different way to play the ongoing artificial intelligence (AI) revolution may want to consider Evolv Technologies Inc. (NASDAQ: EVLV). The company provides AI-based touchless security systems that are used in schools, stadiums, arenas, and more. The idea is to provide an orderly traffic flow while still allowing law enforcement to detect firearms, improvised explosive devices, and tactical knives.
At first glance, investors may notice that the company's revenue growth rate is slowing. But that’s due to a shift toward a subscription-based model. So far, the company has a high customer retention rate. Plus, Evolv just delivered its first profitable quarter on both a GAAP and non-GAAP basis.
Since that earnings report, EVLV stock is up 30%. However, it’s still down 44% in the last 12 months, which is in-line with analysts’ expectations for 46.6% growth in the stock price.
About Evolv Technologies
Evolv Technologies Holdings, Inc provides artificial intelligence (AI)-based weapons detection for security screening in the United States and internationally. Its products include Evolv Express, a touchless security screening system designed to detect firearms, improvised explosive devices, and tactical knives; and Evolv Insights that provides self-serve access, insights regarding visitor flow and arrival curves, location specific performance, system detection performance, and alarm statistics.
Read More - Current Price
- $4.13
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $5.75 (39.2% Upside)
#4 - Uranium Energy (NYSEAMERICAN:UEC)
Uranium Energy Corp. (NYSEAMERICAN: UEC) makes this list of stocks to buy under $5 because of the key role it plays in the nuclear energy industry. With more attention being given to finding truly clean energy solutions, nuclear energy is drawing renewed interest. That will increase demand for uranium which would be bullish for mining stocks.
Investors are still waiting. As of September 2024, the spot price of uranium is down approximately 13% for the year. And since mining stocks lag behind the price of the underlying commodity, UEC stock is down 26% in 2024, but it’s up 5.2% in the 30 days ending September 11, 2024. Some of the interest is due to the successful restart of production at the company’s Christensen Ranch In-Situ Recovery (ISR) operations.
Short interest on UEC stock sits at around 11%. However, the Uranium Energy analyst forecasts on MarketBeat give the stock a $9.35 price target which would be an 82% gain in the next 12 months.
About Uranium Energy
Uranium Energy Corp., together with its subsidiaries, engages in exploration, pre-extraction, extraction, and processing uranium and titanium concentrates in the United States, Canada, and Paraguay. It owns interests in the Palangana mine, Goliad, Burke Hollow, Longhorn, and Salvo projects located in Texas; Anderson, Workman Creek, and Los Cuatros projects situated in Arizona; Dalton Pass and C de Baca project located in New Mexico; Roughrider, Shea Creek, Christie Lake, Horseshoe-Raven, Hidden Bay, Diabase, West Bear, JCU, and other project located in Canada; and Yuty, Oviedo, and Alto Paraná titanium projects in Paraguay.
Read More - Current Price
- $4.95
- Consensus Rating
- Buy
- Ratings Breakdown
- 4 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $10.19 (106.0% Upside)
#5 - Curaleaf (OTCMKTS:CURLF)
Cannabis stocks are still a risky play and Curaleaf Holdings Inc. (OTCMKTS: CURLF) is no exception. However, the industry stands to benefit as it seems increasingly likely that marijuana will be classified as a less restrictive Schedule III drug. The Biden administration took an initial step towards reclassification and Donald Trump has expressed support, so the progress should move forward regardless of the outcome of November’s election.
Additionally, Curaleaf continues to expand its operations internationally, particularly in Europe. That’s significant because countries like Germany have already legalized cannabis. That will provide another revenue stream for a company that has gotten stagnant in that category.
Then there’s the CURLF stock price which is down 27% in 2024. Analysts have a $6.25 price target on the stock, which is 111% higher than the stock’s price on September 11, 2024. One note of caution, as an over-the-counter security, CURLF stock may not be available through every online broker or trading platform.
About Curaleaf
Curaleaf Holdings, Inc operates a cannabis operator in the United States. It operates through two segments, Domestic Operations and International Operations. The company offers flower, pre-rolls, flower pots, and dry-herb vaporizer cartridges; concentrates for vaporizing which includes pre-filled vaporizer cartridges and disposable vaporizer pens; and concentrates for dabbing, such as mints, distillate droppers, mints, topical balms and lotions, tinctures, lozenges, capsules, and edibles.
Read More - Current Price
- $2.90
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $6.25 (115.5% Upside)
#6 - Opendoor Technologies (NASDAQ:OPEN)
The housing market is expected to benefit significantly from interest rate cuts. A lower federal funds rate will also mean lower mortgage rates. That could, in theory, unlock some of the supply issues facing the sector.
If homeowners do start listing, you’ll be glad you invested in Opendoor Technologies Inc. (NASDAQ: OPEN). The online platform is designed to let homeowners sell their homes directly to Opendoor without needing a traditional real estate agent. The platform also provides services for buyers.
There’s no sugarcoating the 56% decline in OPEN stock in 2024. The company has delivered five consecutive quarters of declining year-over-year (YoY) revenue. However, in its most recent quarter that YoY decline was significantly less, showing the company may face easier comparisons.
It could also be set up for significant gains should the company’s growth begin to accelerate. That seems to be the sense of analysts who give the stock a price target of $2.69 which is 31.9% higher than its closing price on September 11, 2024.
About Opendoor Technologies
Opendoor Technologies Inc operates a digital platform for residential real estate transactions in the United States. It buys and sells homes. The company's product offerings comprise sell to opendoor product that enables homeowners to sell their home directly to it and resell the home to a home buyer; list with opendoor product that allows customers to list their home on the MLS with opendoor and receive cash offer; and opendoor marketplace product that connects the home seller with an institutional or retail buyer.
Read More - Current Price
- $2.20
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $2.69 (22.1% Upside)
#7 - B2Gold (NYSEAMERICAN:BTG)
At over $2,500 per troy ounce, gold is near a record high, and it’s also been one of the best-performing asset classes in 2024. Many industry analysts believe that the 2024 gold rush is not over. Some even believe that $3,000 is possible. If you don’t invest in physical gold, mining stocks such as B2Gold Corp. (NYSEAMERICAN: BTG) are a good alternative.
The Canadian-based miner has restarted and is expanding operations at its Fekola mine. In addition, the company has developed another project, the Goose Mine. B2Gold is also using aggressive drilling programs as an opportunity to unlock more reserves.
BTG stock is down 12.9% in 2024. However, it’s up about 11% in the month following the company’s earnings report. After a post-earnings sell-off, investors may be deciding that the bull case for gold - and therefore gold miners - still has room to run. Analysts give BTG stock a consensus price target of $3.78, which is a 37% upside as of this writing.
About B2Gold
B2Gold Corp. operates as a gold producer company. It operates the Fekola Mine in Mali, the Masbate Mine in the Philippines, and the Otjikoto Mine in Namibia. The company also has an 100% interest in the Gramalote gold project in Colombia; 24% interest in the Calibre Mining Corp.; and approximately 19% interest in BeMetals Corp.
Read More - Current Price
- $3.26
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $3.78 (15.8% Upside)
Investing in stocks under $5 (which are frequently lumped into the penny stock category) is not without risk. These stocks are often those of companies that are not yet profitable. And, as investors saw during the dot-com era, some may end up going bankrupt.
Even fundamentally sound stocks under $5 are frequent targets of short sellers. The goal is to shake out investors and then buy the shares back at a lower price. Rinse, lather, repeat. Conversely, it's common for penny stocks to be part of a ‘pump and dump' strategy, where a stock's price shoots higher to generate interest, only to have traders sell the stock, leaving many investors holding the bag.
One way to protect yourself is to stay informed of news that could affect your investments. This includes press releases, earnings reports, and analyst ratings. MarketBeat has you covered. Our website is a one-stop resource to keep you in the loop about the stocks you own and those that are on your watchlist.
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