Penny stock investing is known to be highly risky, but there are certain stocks out there that have attractive growth potential and could offer substantial returns. While investors should conduct their own research to select a penny stock, they can also consider Wall Street analysts’ opinions. With the help of the TipRanks’ Penny Stock Screener tool, we selected three penny stocks with a “Strong Buy” consensus rating – Fusion Pharmaceuticals (NASDAQ:FUSN), CalAmp (NASDAQ:CAMP), and Iris Energy (NASDAQ:IREN). Using TipRanks’ Stock Comparison tool, we placed these three penny stocks against each other to pick the one with the most attractive upside potential.
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Fusion Pharmaceuticals (FUSN)
Fusion Pharmaceuticals is a clinical-stage biopharmaceutical company focused on next-generation radiopharmaceuticals for the treatment of cancer.
The company’s first program, FPI-1434, is currently in Phase 1 clinical trial for the treatment of solid tumors. FPI-1434 targets insulin-like growth factor 1 receptor. The company’s FPI-1966 program, designed to target the fibroblast growth factor receptor 3, is also in the Phase 1 study. Fusion’s pipeline also includes FPI-2059, a small molecule targeting neurotensin receptor 1, which received FDA investigational new drug clearance in June 2022. The company intends to begin a Phase 1 study for FPI-2059, which could address several solid tumors, including neuroendocrine differentiated prostate, colorectal and pancreatic cancers.
Is FUSN Stock a Buy, Hold, or Sell?
Last week, Truist Financial analyst Nicole Germino initiated coverage on Fusion with a Buy rating and a price target of $10. Germino is bullish on the stock due to the encouraging initial Phase 1 data for the company’s lead asset, FPI-1434, which targets solid tumors. The analyst estimates about $400 million in peak adjusted sales for FPI-1434.
Germino sees near-term upside potential in the stock driven by the Phase 1 antitumor data for the lead candidate in the first half of 2023.
Germino opines that “FUSN’s proprietary technology platform, investment in reliable suppliers & in-house manufacturing” set it apart from its peers.
Overall, Fusion Pharmaceuticals boasts a Strong Buy consensus rating based on four unanimous Buys. The average FUSN price target of $10.67 suggests nearly 240% upside potential. Shares are down nearly 25% year-to-date.
CalAmp (CAMP)
CalAmp uses a data-driven solutions ecosystem to help its customers improve their operational performance. It helps clients in the transportation and logistics, commercial and government fleet, industrial equipment, and consumer vehicle marketplaces to enhance efficiency and compliance by offering solutions that monitor and protect vital assets.
CalAmp is scheduled to announce its Fiscal 2023 second-quarter results after the market closes on September 22. Analysts expect the company to report a loss per share of $0.03 compared to an EPS of $0.08 in the prior-year quarter.
CalAmp has been under pressure due to supply chain bottlenecks. The company missed analysts’ expectations for the first quarter of Fiscal 2023 (ended May 31, 2022), with revenue declining 19% year-over-year to $64.7 million. Also, the company reported an adjusted net loss per share of $0.10 compared to adjusted earnings per share of $0.08 in the prior-year quarter. The company did not provide any specific outlook for Q2 but stated that it expects sequential quarterly revenue growth in the mid to high single-digit percentage points.
What Is the Target Price for CalAmp Stock?
Last month, Craig-Hallum analyst Anthony Stoss upgraded CalAmp stock to a Buy from Hold and raised the price target to $10 from $8. While Stoss noted that the company has been impacted by major component shortages over the last six quarters, he believes the worst is in the rearview mirror.
The analyst expects supply woes to continue to be a drag on CalAmp’s results through Fiscal 2023. That said, Stoss expects conditions to improve and pointed out that the company is successfully growing its SaaS business.
Along with Stoss, two other analysts are also bullish on CalAmp, thus leading to a Strong Buy consensus rating. At $11.33, the average CAMP price target implies 128.4% upside potential. CAMP stock has declined 30% so far this year.
Iris Energy (IREN)
Australia-based Iris Energy operates its own data center and electrical infrastructure for the mining of Bitcoin (BTC-USD). The company’s Bitcoin mining data centers are predominantly powered by 100% renewable energy.
Iris Energy recently reported results for the full-year Fiscal 2022 (ended June 30, 2022). The company’s revenue jumped to $59 million from $7.9 million in Fiscal 2021, driven by the rise in average operating hash rate and a higher average realized price per Bitcoin. Adjusted EBITDA increased to $26.2 million from $1.4 million in Fiscal 2021.
Is Iris Energy Stock a Good Buy?
Recently, Compass Point analyst Chase White upgraded Iris Energy stock to a Buy from Hold and increased the price target to $6.50 from $6.00. White highlighted the growth in the company’s hash rate at a time when other miners are struggling to achieve their hash rate targets or operate at full capacity. The analyst attributed this to Iris Energy’s “best-in-class” execution.
During the Q4 earnings call, the company mentioned that it energized 50 megawatts at its Prince George facility, which will ensure that it hits its target of 37 exahash per second by the end of September.
White believes that Iris has the ability to further grow its contracted hash rate “through a deal similar to the one executed in August with vendor Bitmain to secure additional hash rate at a low cost.”
All in all, Iris Energy scores the Street’s Strong Buy consensus rating based on four recent bullish reviews. The average Iris Energy stock price prediction of $6.63 implies 65.8% upside potential. Shares have plunged 75% year-to-date amid the crypto winter.
Conclusion
Wall Street analysts are highly bullish about the growth prospects of Fusion Pharmaceuticals, CalAmp, and Iris Energy. Based on the upside potential, Fusion stock seems to be a better pick.
What’s more, Fusion scores eight out of 10 on TipRanks’ Smart Score System, implying that the stock could outperform the broader market.
However, investors must be aware that investing in penny stocks could be highly risky and speculative, and they should do their due diligence before making an investment decision.
