Penny stocks are shares of companies trading below $5 per share. But these cheap stocks aren’t “lotto tickets,” unlike what popular opinion might make you think. Sure, can you get lucky trading penny stocks like playing roulette?
Of course, but that can also go for higher-priced stocks or options. The exciting thing about penny stocks is that you’re sure to find a handful of low-priced stocks surging higher no matter what the markets are doing. The main reason for that is their speculative environment. As traditional “growth” or “emerging phase” companies, expectations aren’t necessarily as stringent as they might be for a company like Apple.
In many cases, missing earnings, for example, can come secondary to management’s future projections. On top of that, it might come down to just one sentence in one press release that sends a penny stock explosively higher (or lower), depending on what’s reported. This article will look at a few stocks under $5 that analysts have bullish ratings on.
It’s up to you to decide whether you agree with them. However, these reports can give you additional insight into what Wall Street thinks about specific companies.
Penny Stocks To Buy [According To Analysts]
- 8×8 (NYSE: EGHT)
- Reviva Pharmaceuticals Holdings Inc. (NASDAQ: RVPH)
- Ardagh Metal Packaging S.A. (NYSE: AMBP)
- Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE)
8×8 (NYSE: EGHT)
Since last week, 8×8 has been steadily increasing in the stock market. The cloud communications company reported more robust earnings results than initially expected. Total revenue increased 24% to $187.4 million compared to last year. 8×8 management highlighted its Fuze revenue was a more significant contributor during the quarter. The company also anticipates continued growth through the end of its fiscal year ending next March, with year-over-year revenue growth of 18% in a range of $745 million – $755 million.
“Our second quarter results reflected our increased emphasis on profitability and cash flow generation. Non-GAAP gross margin was above 70% and non-GAAP operating profit and operating cash flow exceeded our expectations…As a result, we are once again raising our non-GAAP operating margin targets for the year and believe we have line of sight to double-digit operating margins on a non-GAAP basis in fiscal 2024.”
Dave Sipes, 8×8 Chief Executive Officer
EGHT Stock Forecast
There are several analysts covering 8×8 right now. Needham has the highest EGHT stock forecast right now with a $6 target and Buy rating. Meanwhile, of the recent analyst updates, Wells Fargo analysts have EGHT’s stock forecast lower at $4 alongside a Neutral rating.
Reviva Pharmaceuticals Holdings Inc. (NASDAQ: RVPH)
Shares of Reviva Pharmaceuticals have been on fire since August. The penny stock has increased from under $1 to over $4 during that period, thanks to earnings. Although the figures weren’t jaw-dropping, the overall focus was on the business update that followed the financial results. Remember what was discussed above. Penny stocks are highly speculative, and with that can come unique circumstances that see “bad” news taken as good, depending on what’s discussed.
In the last quarterly update, comments from CEO Laxminarayan Bhat, Ph.D., got the party started. Bhat said, “This quarter, our focus remained on further advancing the clinical development of our lead asset, brilaroxazine…With over 20% of the approximately 400 patients planned already enrolled, we remain on pace across the 15 sites in the United States, and we anticipate an acceleration in enrollment with the initiation of additional sites in Europe and India by the end of September.”
Those comments were enough to fuel speculation as shares of RVPH climbed higher. This week Reviva announced its latest global enrollment update highlighting the upbeat prospects of its Phase 3 RECOVER study. It’s evaluating Reviva’s brilaroxazine for treating schizophrenia, and multiple enrollment sites in India are anticipated this year.
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The most recent RVPH stock forecast comes from Alliance Global Partners. This week the firm initiated coverage on REviva with a Buy rating. It also announced a $16 price target representing a 308% outlook from recent closing levels on October 31st.
Ardagh Metal Packaging S.A. (NYSE: AMBP)
A recent turnaround story in the market has placed a focus on Ardagh Metal Packaging. The company specializes in sustainable metal beverage cans. Thanks to the latest round of AMBP earnings, the penny stock has experienced a bit of a turnaround in the market this week.
Global beverage can shipments grew by 9% in the quarter, with growth of 10% in the Americas and 9% in Europe. Although, Adjusted EBITDA dropped 15% thanks to higher input costs. A challenging third quarter has given way to the company’s active approach to managing costs.
AMBP Stock Forecast
Despite some analysts lowering price targets, ratings remain bullish. Barclays recently maintained its Overweight rating on the penny stock and currently has a $6 target. BMO Capital, however, downgraded the stock last week to a Market Perform but maintained a price target higher than the latest trading levels.
Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE)
Another one of the biotech penny stocks to watch with bullish analysts is Aeglea BioTherapeutics. Last month, the metabolic treatment development company announced dosing in the third cohort of its pegtarviliase Phase 1/2 trial. The therapy is under evaluation in treating Classical Homocystinuria.
Aeglea also hosted a Key Opinion Leader webinar that seems to have sparked some bullish momentum in recent sessions. The KOL Harvey Levy, MD, discussed the unmet medical need and current treatment landscape for patients suffering from Classical Homocystinuria. Thanks to these latest updates, AGLE stock has gained the attention of traders in November.
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What is the outlook for AGLE stock from analyts? Last week Wells Fargo lifted its rating to Overweight on Aeglea. It also bumped its $1.50 price target to $2. At the same time, Piper Sandler raised its rating to Overweight from Neutral. It also boosted its $1 price target to $1.50.
Trading Penny Stocks With Analyst Ratings
This article discussed a handful of penny stocks with analyst ratings. It’s important to understand that these types of ratings and forecasts aren’t the ultimate say in whether or not to trade cheap stocks.
However, they can come in handy as part of your overall research & due diligence process. Understanding what so-called “smart money” is looking at can help gauge what might be essential to pay attention to and what might not hold as much weight in general.
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