Quantum Computing and Undervalued Stocks: Potential Breakout Opportunities

3 Standout Stocks Under $10 With 86% Upside Potential or More

Investing in penny stocks has always been a tricky business. Primarily associated with opaque corporate governance practices, lack of liquidity, and dodgy financials, researching penny stocks can be akin to cracking a black box - too little information for too much uncertainty. However, picking multi-baggers from high-potential group is also possible, with the right amount of caution and some top-notch due diligence. Great companies like Amazon (AMZN), Apple (AAPL) and recent artificial intelligence (AI) leader Nvidia (NVDA) were all penny stocks at one point or another, and the patient investors who stuck through the slow, "dead money" periods in these stocks have amassed generational wealth now, thanks to their investments in these companies. As inflation starts to trend lower, setting the stage for a likely Fed rate cut at the September meeting, the macro environment is ripe for investors to add a few carefully selected penny stocks with solid fundamentals and promising growth prospects. To that end, here are three stocks from the space that have attracted bullish attention from analysts, with significant upside potential expected from current levels. #1. Opal Fuels Based out of White Plains, NY, Opal Fuels (OPAL) is a leading vertically integrated producer and distributor of renewable natural gas (RNG) for use as a transportation fuel and renewable electricity. The company operates across the entire RNG value chain, from the production and processing of RNG to its distribution and sale. The company is currently valued at a market cap of $674 million. OPAL stock is down 29% on a YTD basis, and trades near 52-week lows. Although the results for the latest quarter saw Opal missing Wall Street's estimates, it was still an improvement from the previous year. Revenues for the first quarter went up by 51% on a YoY basis to $65 million, while losses narrowed from $0.06 per share in the previous year to $0.01 per share. During Q1, Opal produced 0.8 million MMBtu of RNG, up 33% from the previous year. Notably, RNG sold as a transportation fuel was 16.4 million GGEs, up 98% from the prior year. The company closed the quarter with a cash and equivalents balance of $34.2 million. Net cash from operating activities more than tripled to $13.7 million from $4.2 million in the prior year. Apart from its prowess in the RNG domain, Opal has other revenue drivers, as well. Its Fuel Station Services business is engaged in the construction and O&M of fuel stations for third parties, as well as its own. Opal's fuel services business has also seen steady growth over the years; in FY23 it operated through 298 stations, up from 137 in FY22 and just 68 in FY21. Moreover, the company's renewable Power segment engages in electricity generation from biomethane with a nameplate capacity of 112MW, making up 21.4% of its total revenues in FY23. With its expertise in the growing RNG market and other revenue drivers, analysts have a consensus rating of "Strong Buy" for OPAL stock, with a mean target price of $8.38. This denotes an upside potential of about 114% from current levels. Out of 8 analysts covering the stock, 7 have a "Strong Buy" rating and 1 has a "Strong Sell" rating. #2. Ocular Therapeutix Founded in 2008 and based out of Bedford, Mass., Ocular Therapeutix (OCUL) is a biopharmaceutical company focused on developing innovative therapies for eye diseases. The company's core technology, Elutyx, involves using a biodegradable polymer platform to deliver drugs directly to the eye. The company's market cap currently stands at $1.25 billion. OCUL stock is a notable outperformer, having rallied 80.5% on a YTD basis. While revenue and earnings missed estimates in the first quarter, Ocular did report top-line growth. Revenues grew by 10.5% from the previous year to $14.8 million, as core product revenues climbed to $14.7 million from $13.2 million in the year-ago period. However, losses widened to $0.49 per share (vs $0.39 per share in Q1FY23), coming in much wider than the consensus estimate of a loss of $0.19 per share. The company's cash balance received a substantial boost from the start of the year to end Q1 at $482.9 million, compared to just $195.8 million in Q1FY23. The cash balance towered over the company's debt levels of $74.4 million. Ocular's commercial product, Dextenza, for post-surgical ocular inflammation and pain - which is also indicated for ocular itching due to allergic conjunctivitis - has gained noteworthy market acceptance in the retinal therapy space. As of 2023, the company claims that around 400,000 eyes had been treated, with a net product revenue of $57.9 million. Moreover, the company also has various drugs in the development phase as well. Ocular Therapeutix's pipeline includes Axpaxli, an axitinib intravitreal implant, in Phase 3 trials for wet age-related macular degeneration (AMD). Enrolled in Q1 2024, the trial aims to potentially expand Axpaxli's indication to diabetic retinopathy in Phase 1/2 studies. Additionally, Paxtrava, an intracameral travoprost implant in Phase 2, targets glaucoma and ocular hypertension. Positive Phase 2 topline results were announced in April 2024. Travoprost, a prostaglandin analog, reduces intraocular pressure to protect the optic nerve. The implant delivers continuous drug release within the eye's anterior chamber. Ocular's expansion plans gained momentum as partner AffaMed Therapeutics secured Singapore Health Sciences Authority approval for Dextenza's New Drug Application. AffaMed collaborates with Ocular to develop and distribute Dextenza and Paxtrava across Greater China, South Korea, and other Asian markets. Taking all of this into account, analysts have deemed OCUL stock a "Strong Buy," with a mean target price of $15. This indicates an upside potential of roughly 86% from current levels. Out of 9 analysts covering the stock, 8 have a "Strong Buy" rating and 1 has a "Hold" rating. #3. Nuvation Bio We conclude our list of compelling penny stocks with Nuvation Bio (NUVB), a New York-based clinical-stage biopharmaceutical company focused on developing innovative cancer treatments. The company's pipeline includes a range of drug candidates targeting specific cancer types and mechanisms. Its market cap currently stands at $810 million. NUVB stock has been on a tear in 2024 so far, more than doubling with a return of 117%. Primarily focused on research and development like many early-stage biopharmaceutical companies, Nuvation is still pre-revenue. In the first quarter, research and development expenses slid by 32% from the prior year to $12.8 million. The company attributed the improvement to a $6.7 million decline in third-party research services and drug manufacturing costs. Nuvation exited the quarter with a cash balance of $597 million, much higher than its total debt balance of just $3.5 million. There's plenty of optimism stemming from its all-stock acquisition of AnHeart Therapeutics, allowing Nuvation to secure access to taletrectinib, a potential best-in-class ROS1 inhibitor. The deal also brought safusidenib, a Phase 1 mutant IDH1 inhibitor that demonstrates high blood-brain barrier penetration. Additionally, Nuvation's in-house BD2 selective oral small molecule BET inhibitor, NUV-868, epigenetically regulates tumor growth and differentiation. The company recently secured IND approval for NUV-1511, a DDC targeting solid tumors in early-stage development. Overall, analysts have a rating of "Strong Buy" for NUVB stock, with a mean target price of $6.6, which denotes an upside potential of about 101% from current levels. Out of 6 analysts covering the stock, 5 have a "Strong Buy" rating and 1 has a "Moderate Buy" rating. On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Quantum Computing Stocks With Big Breakout Potential

The quantum computing industry is growing rapidly, as the rise of artificial intelligence (AI) necessitates faster and more sophisticated architecture to carry out complex tasks. Unlike binary digits used in classical computing, the technology uses quantum bits, or qubits, that can occupy the position of both 0 and 1 simultaneously, known as superposition. This allows quantum computers to work faster, run multidimensional algorithms, and solve for more complex problems. Although major companies like Microsoft (MSFT) and IBM (IBM) dominate the market for this costly tech, some smaller startups are also making significant strides. Quantum technology is projected to add trillions of dollars in value to the economy over the next decade, which means some of the smaller stocks in this niche could be on the cusp of a hypergrowth phase. While penny stocks can be risky, and highly volatile, they can also offer substantial rewards when they hit. So, while they're best reserved for investors with a healthy risk appetite, let's take a closer look at these three quantum computing stocks with more than 190% upside potential. #1. Quantum Computing Founded in 2001, Quantum Computing (QUBT) offers innovative solutions for application software and the power of quantum mechanics to tackle complex problems beyond the reach of traditional computers. It specializes in both quantum optics and quantum optics technology. QUBT serves diverse industries such as finance, healthcare, logistics, and cybersecurity. The company's innovative, integrated photonics technology operates at room temperature with low power consumption, making quantum computing more accessible and affordable. Valued at $58 million by market capitalization, QUBT stock is down by 26.8% year to date, falling well short of the S&P 500 Index's ($SPX) gain of 15.3%. However, this could be an opportunity to buy the stock on the dip, as analysts predict more than 1,200% upside for QUBT. On June 11, the company reported its Q1 financial results, with decent progress. Revenue came in at $27,000, with a high gross margin of 42%. Most importantly, the company trimmed its operating expenses by 18% from the previous year, driven by a strategic approach to reducing administrative expenses. On an adjusted basis, QUBT reported a loss per share of 8 cents, matching analysts' estimates. Looking ahead, Wall Street expects the loss per share to narrow by 18% this fiscal year, on revenue growth of over 100%. Recently, the company achieved a significant milestone by receiving a NASA contract to eliminate sunlight interference from LiDAR spectral mapping in low Earth orbit. This will help the company enhance the precision of its remote sensing technology and expand its applications in various space-based projects. From analysts' point of view, QUBT is a" moderate buy," with the sole expert in coverage handing out a price target of $8.75. This suggests the stock has a massive 1,225% upside potential from its current price. #2. D-Wave Quantum Founded in 1999, D-Wave Quantum (QBTS) is a Canadian-based company specializing in developing and delivering quantum computing systems and software. Known for creating the world's first commercially available quantum computer, D-Wave focuses on providing advanced quantum solutions to address complex computational problems across various industries, including optimization, machine learning, and material sciences. Earlier this year, QUBTS announced the 12,000-qubit Advantage2 prototype, which features advanced quantum annealing capabilities and enhanced error correction mechanisms. With a market cap of $184 million, D-Wave Quantum stock has soared by 15.9% year-to-date, right on pace with the broader market. One of the best things about QBTS is its revenue growth. In Q1 2024, sales grew by 56% YOY, reaching $2.5 million. Also, its gross profit increased to $1.7 million, a massive 325% jump from last year. This is a clear testament that company is rapidly scaling its operations and effectively capturing market opportunities. Nevertheless, the company's EPS fell short of analysts expectations, with a reported loss of 11 cents. Looking ahead, experts are calling for revenue at QBTS to grow by 42.5% this fiscal year, with the full-year per-share loss projected to narrow by 42.3%. Overall, analysts are optimistic about QBTS, giving it a consensus rating of "strong buy" and a mean price target of $3. That suggests expected upside potential of nearly 193%. #3. Rigetti Computing Founded in 2013, Rigetti Computing (RGTI) develops superconducting quantum processors and offers cloud-based quantum computing services, including its 9-qubit chip and Ankaa-2 system. The company provides quantum computing access, cloud integration, and support for quantum software. It also offers professional services in algorithm development and quantum application programming. The company has massive room for long-term growth in quantum computing, with more than 165 patents in its portfolio. Additionally, it has built a strategic partnership with Oak Ridge National Laboratory to work to improve HPC-Quantum Integration. Valued at $192 million, shares of RGTI have soared by 12.2% in 2024, slightly lagging the broader market. However, the shares are trading at an attractive valuation of 11x sales, which is reasonable given the company's growth projections. On May 9, Rigetti posted strong Q1 results for this fiscal year. Revenue came in at $3.1 million, a 41% jump year over year. Additionally, the firm managed to reduce its net income loss by 11% from last year. Turning to the balance sheet, the company's net cash flow improved by 137% year over year and, for the first time, hit a positive figure of $13.7 million. This shows its strengthened financial position and effective cash management. Looking ahead, analysts expect RGTI's revenue to grow by 27% while its loss per share is projected to improve by 44% in fiscal year 2024. Overall, analysts rate the stock as a "strong buy," based on 2 "strong buys and 1 "moderate buy." The average 12-month price target for RGTI is $3.17, which means the stock has 192% upside potential. On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.