BLDE - 7 Penny Stocks That Could Join the Top 100 Companies List
2024-06-19 06:00:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Many people scour through penny stocks to “find the next Google ,” and while doing that is exceedingly difficult—or even impossible—I still think it makes sense to keep an eye out for many up-and-coming companies that could deliver multibagger returns if the stars align for them. Who knows? Maybe these companies could even join the top 100 list!
Setting aside a small portion of your portfolio for these moonshot picks makes sense. If they keep gaining market share and their tailwinds get better, I think it is possible to realize outsized gains from some of these penny stocks.
Regardless, I would warn that this is highly speculative. These companies could make it to the top 100 list, but the chance of them not doing so is far greater. With that in mind, let’s dive in and look at the penny stocks!
Blade Air Mobility (BLDE)
Blade Air Mobility (NASDAQ: BLDE ) operates as a technology-powered air mobility platform. I believe this high-risk, high-reward penny stock could potentially join the ranks of America’s top companies if it can successfully capitalize on the nascent flying car megatrend.
In Q1, Blade posted strong 13.8% revenue growth to $51.5 million . Notably, its core medical transport business achieved record revenue and profitability, cementing Blade’s position as the nation’s largest dedicated air transporter of human organs.
However, the real moonshot potential lies in Blade’s ambitious bet on flying cars and air taxis. While this remains highly experimental, a future where flying vehicles take to the skies en masse could revolutionize transportation and propel first movers like Blade to incredible heights. Analysts are quite bullish here.
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Of course, we are likely years away from viable flying car services. Blade will need to keep its medical segment humming to fund this speculative innovation. But with little domestic competition thus far, Blade seems well-positioned to ride the air mobility wave if the stars align.
Creative Realities (CREX)
Creative Realities (NASDAQ: CREX ) provides digital signage solutions. I believe CREX is a penny stock that could become a big player in the rapidly growing digital signage industry. The company posted record Q1 revenue of $12.3 million, up a robust 23.5% year-over-year . While the pandemic may have initially overinflated the digital signage space, the current hype around these stocks is more organic and supported by strengthening fundamentals.
As more companies embrace remote work, the demand for effective digital communication and collaboration tools is skyrocketing. CREX’s impressive 45% YOY growth in high-margin service revenue reflects this megatrend. Moreover, annual recurring revenue hit a record $17.7 million.
I think it could generate billions in revenue if it keeps executing. Again, this is highly optimistic but still in the realm of possibility. This industry could be worth nearly $52 billion by 2033 .
FlexShopper (FPAY)
FlexShopper (NASDAQ: FPAY ) offers a lease-to-own platform for consumers to obtain durable goods. I believe this innovative business model is well-positioned to thrive in the current economic climate and beyond. With inflation squeezing budgets, many middle—and lower-income consumers are shying away from big-ticket purchases. FlexShopper’s lease-to-own solution provides an attractive alternative, allowing customers to acquire needed items with manageable payments and the option for ownership.
In Q4, FlexShopper delivered strong 42% YOY growth in net lease and loan revenues, and gross profit skyrocketed over 300%. Notably, FlexShopper is strategically expanding its flexshopper.com business from a lease-focused lead generator into a multi-faceted retail platform. FlexShopper aims to significantly boost the conversion of site visitors into paying customers by offering additional payment options to suit various credit profiles. Management also plans to widen product selection and onboard more merchant partners. I find this business model very interesting.
CareCloud (CCLD)
CareCloud (NASDAQ: CCLD ) provides healthcare organizations with technology-enabled solutions for medical billing and revenue cycle management. I believe this small-cap company is well-positioned to benefit from the accelerating trend of healthcare providers outsourcing these critical functions to streamline operations and boost profitability. CareCloud’s niche automated software has significant room for growth as the healthcare industry continues to be among the fastest-expanding sectors.
However, the company’s Q1 results were sluggish, with revenue declining 13.5% YOY to $26 million , slightly missing estimates. Management attributed this primarily to lower non-recurring revenue from its MedSR division. On a positive note, CareCloud’s digital health offering saw revenue surge nearly 4x compared to the prior year, highlighting the potential for cross-selling its higher-margin tech-enabled RCM services to existing clients. We could also see some near-term upside due to improving EPS.
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While the company is laser-focused on profitability and cash flow generation, having already identified $22 million in annualized cost reductions, its near-term growth prospects remain muted. That said, in a best-case scenario, CareCloud’s unique positioning in a rapidly growing industry could turn it into one of the biggest companies.
BM Technologies (BMTX)
BM Technologies (NYSEMKT: BMTX ) provides digital banking services to colleges and universities. The company reported strong Q1 2024 results, with revenue up 21% YOY to $16.2 million and positive core EBITDA of $1.4 million, a $3.2 million improvement. Net income of $748,000 was a $5.7 million increase from the prior year.
I believe BMTX could be poised for a major turnaround as interest rates stabilize and the banking sector recovers. Digital banking is a massive growth trend, and BMTX has a dominant position in the university market, serving 1 in 3 college students. This gives them a wide moat to expand into adjacent areas over time.
With five straight quarters of improving EBITDA, BMTX’s foundation looks solid. If macro tailwinds cooperate, this under-the-radar fintech could be a hidden gem ready to capitalize on the digital banking megatrend in the coming years.
SmartRent (SMRT)
SmartRent (NYSE: SMRT ) provides smart home automation solutions for the rental housing industry. I believe this penny stock has the potential to capitalize on powerful megatrends and tailwinds in the residential real estate sector. While there is ongoing debate surrounding housing, demand for homes remains robust, driven by significant migration patterns and the proliferation of smaller family units.
Moreover, homes are increasingly viewed as investments, and as mortgage rates decline, many working individuals may find themselves holding mortgages on multiple properties to generate rental income. SmartRent’s innovative platform, which integrates with leading property management systems, is well-positioned to benefit from these evergreen tailwinds.
In Q1, the company reported $50.5 million in revenue , with SaaS recurring revenue growing 32% YOY to nearly $12 million. SmartRent also achieved positive adjusted EBITDA for the second consecutive quarter, beating guidance. Analysts expect 15-20% annual revenue growth going forward, but rate cuts could boost that in the long run.
WM Technology (MAPS)
WM Technology (NASDAQ: MAPS ) provides software infrastructure solutions for the cannabis industry. After a challenging 2023, I believe this beaten-down stock is poised for a major rebound as tailwinds start blowing in its favor again. In Q1, revenue dipped slightly to $44.4 million , but net income surged to $2 million. Adjusted EBITDA also grew nicely to $9.6 million.
Most encouragingly, WM Technology’s cash position increased significantly to $35.7 million. This strengthened balance sheet gives them ample dry powder to invest in growth as the cannabis industry rapidly expands. I expect that the momentum of accelerating legalization will act as a rising tide that lifts profitable companies in the sector. MAPS can definitely survive until then due to positive EBIT.
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As one of the best pure-play cannabis tech stocks , I believe this dark horse is galloping toward a much brighter future and has the potential to become a sector heavyweight.
On the date of publication, Omor Ibne Ehsan did not hold (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 .
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn .
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