3 Stocks Under $3 That Can Trade in Double Digits in 2024
Stocks under $3 sound attractive to investors for several reasons. First, even with a small corpus, a diversified portfolio of high-risk stocks can be created. Further, when looking at under-$3 stocks, there is a high probability of exposure to early-stage companies. If these businesses deliver, the valuations can skyrocket and multibagger returns are likely.
At the same time, investors need to remain cautious among a sea of speculative stocks under $3 that have below average business fundamentals. Some prefer to avoid these purely speculative names and consider exposure to ideas that can be massive value creators backed by fundamental developments.
The following best stocks under $3 can witness a big rally next year because they are deeply undervalued. Additionally, positive business catalysts can trigger massive price action.
Let’s discuss the reasons to be bullish on these stocks.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) stock has been depressed and has corrected by 50% in the last 12 months. However, TLRY stock is poised for a big rally in the coming quarters.
First, a new bill to legalize marijuana has been filed in the U.S. House of Representatives. Any possibility of federal level legalization in the next 24 months would imply multi-fold returns for the stock.
Further, Tilray has been focused on diversification. With multiple acquisitions, Tilray is now the fifth largest craft beer brewer in the United States. This segment is likely to support growth acceleration. Also, a presence in the U.S. beer and beverage industry provides Tilray with a sound strategic infrastructure for cannabis expansion.
Another reason to be bullish on Tilray is improvement in financial metrics. The company has guided for positive adjusted free cash flow in financial year 2024. At the same time, Tilray has witnessed acceleration in international cannabis revenue. With a widely addressable market and a strong liquidity buffer, TLRY stock looks deeply undervalued.
EVgo (EVGO)
Year to date (YTD), most electric vehicle (EV) charging infrastructure stocks have trended lower, although a 2024 reversal is likely due to stellar growth backed by margin improvement. EVgo (NASDAQ:EVGO) stock is among the attractive names to consider after a 54% correction in the last 12 months. Also, the stock has a short interest of 25% of the free-float, which could signal a massive short-squeeze rally.
For Q3 2023, EVgo reported revenue growth of 234% year over year (YOY) to $35.1 million. Network throughput increased to 37GWh as compared to 12GWh in Q3 2022. Notably, by the end of the quarter, EVgo had 3,400 stalls in operation or under construction. As new stalls are operational, robust revenue growth is likely to sustain into 2024.
On the flip-side, EVgo reported adjusted EBITDA loss of $14.2 million. However, YOY EBITDA level losses narrowed, a trend likely to sustain. EVgo has $229 million in cash and equivalents as of Q3, and if the company can turn EBITDA level positive in the next few quarters, the stock is likely to skyrocket.
Blade Air Mobility (BLDE)
Blade Air Mobility (NASDAQ:BLDE) trades just above $3 after a sharp rally of 45% in the last one month. Perhaps an intermediate correction would be a good opportunity to accumulate the stock. Backed by strong financial developments, BLDE stock is likely to trend higher in the next 12 months.
The company is focused on urban air mobility, providing air transport alternatives around congested ground routes in the U.S. With an asset-light model, the business seems attractive with stellar growth likely to sustain.
Further, Blade Air Mobility reported revenue growth of 56% for Q3 2023 to $71.4 million. Additionally, BLDE achieved adjusted EBITDA profitability during the quarter. If key margins continue to improve next year, the stock price action is likely to be significant. Optimists point to growth and margin improvement as the company focuses on the passenger and medical segment. The latter segment is likely to be a major growth catalyst and an EBITDA margin driver.
On the date of publication, Faisal Humayun 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.
