There are some tiny stocks with explosive growth on the table for investors to scoop up this month. I think these companies are some of the best on the market, representing a broad range of penny stocks as well as small-cap stocks that can potentially double in value.
It should be noted that in order for a company to make such a leap, it should be considered an especially risky investment. Volatility is needed for these companies to make such a big move, and this can also move in the opposite direction — to the investor’s detriment. That means investors should consider risk-hedging strategies to offset some of this danger, such as buying into the positions of these companies gradually rather than dropping their whole stack. It allows investors to average their cost basis out over time, as well as avoid some potential losses along the way.
So, if you have a high-risk tolerance, here are three tiny stocks with explosive growth potential that could double their valuation in the near future.
Karat Packaging (KRT)
Karat Packaging (NASDAQ:KRT) provides eco-friendly disposable products for the food service industry. The company has a market cap of around $590 million at the time of writing, as well as a stock price of $29.
I believe KRT’s valuation could soar in the near future. The reason is that for the third quarter of 2023, KRT reported a net income increase of 48.5% to $9.1 million and an adjusted EBITDA increase of $15.2 million. Net sales for the first nine months decreased slightly by 6.1% to $310.1 million, yet the gross profit rose by 16.1% to $118.9 million.
And there’s more good news. KRT’s forward dividend yield stands at 4.14%, and the stock is considered undervalued, with a 63% estimated growth this year.
The company’s recent focus on importing over manufacturing, coupled with a reduction in ocean freight costs, has favorably impacted its gross margins, and I expect this to continue.
KRT, therefore, is one of those tiny stocks with explosive growth potential investors. It’s hard to find a company with a low market cap, solid dividend yield and strong capital growth prospects, but KRT manages to tick all these boxes.
Upstart Holdings (UPST)
Upstart Holdings (NASDAQ:UPST) is a lending platform that applies artificial intelligence to the credit decision-making process.
Some analysts are very bullish on UPST, and I’m inclined to share their optimism. In 2024, UPST is poised for robust revenue growth as its comparables improve.
Also, the company reported a Q4 non-GAAP EPS of -$0.11 last year, which was better than expected, beating the consensus by $0.03. Revenue for the quarter was $140.31 million, a decrease of 4.5% year-over-year but exceeding expectations by $5.01 million. UPST’s guidance for Q1 projects revenue of approximately $125 million.
Some analysts have also made some robust forecasts for UPST stock. For FY2025 especially, its EPS is estimated to hit $.12, and revenues could reach $738 million. That could be attractive for investors, making this one of those tiny stocks with explosive growth potential.
GreenPower Motor (GP)
GreenPower Motor (NASDAQ:GP) designs, manufactures and distributes electric vehicles.
I feel that investors who are bullish on the EV sector should carefully consider buying shares in GPV stock. The company announced a significant increase in revenue, reporting $34.2 million year-to-date for fiscal 2024, a 40% increase from the previous year.
GP’s market cap stands at $53.4 million, with a high beta of 4.27. The company does not have a PE ratio due to its lack of net earnings, and its EPS (TTM) is -0.63. All of these factors mean that GP could have a significant potential to double in price thanks to its high beta and low market cap. If it can reach breakeven profitability, that could be especially accretive for investors.
Indeed, its stock forecast for the next 12 months looks very attractive at a 187.73% predicted increase. Analysts also estimate its revenues will increase to $60.3 million in FY2025, thus making it one of those tiny stocks with explosive growth potential.
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.