Golden Picks: 3 Under-$20 Stocks Set to Quintuple by 2027 (2024)

Three stocks under $20 may lead to explosive growth in the stock market. Investing in these stocks priced under $20 today could potentially be a 5X investment by 2027. It sounds like a fantasy, but such opportunities exist within the tech, industrial, and financial sectors.

With its rapid revenue growth and sharp margin management, the first one stands as a pillar of stability. The second one is holding constant revenue expansion and a solid backlog, breeding confidence in its capability to seize market demand. Meanwhile, the third dazzles with its accelerating revenue, considerable margin enhancement, and expanding legion of customers. This is signaling a paradigm shift in fintech.

Read more to dive into the fundamental depths of these under-$20 stocks. Learn their leads toward the potential for astronomical growth. In the stock market turbulence, these stocks may have untold riches. They are the golden picks destined to quintuple one’s investment by 2027.

Under-$20 Stocks to Quintuple: Sanmina (SANM)

Sanmina (NASDAQ:SANM) reports top-line growth and stability with bottom-line improvement that may continue to boost its valuations. In Q1 fiscal 2024, Sanmina reported revenue of$1.87 billion. Additionally, for the second quarter ending March 30, 2024, Sanmina forecasts revenue between $1.825 billion and $1.925 billion, demonstrating growth and stability.

Fundamentally, top-line growth is vital for assessing its rapid performance growth potential. Despite challenges like ongoing customer inventory adjustments and softer demand across industries, Sanmina maintains its top-line stability. Specifically, the provided outlook for the second quarter further reinforces the company’s ability to sustain its revenue-progressiveness.

At the bottom line, Sanmina attained a non-GAAP gross margin of8.8% in Q1. Similarly, Sanmina expects a non-GAAP gross margin of 8.3% to 8.8% for Q2 2024. Sanmina’s gross margin management is a critical factor that may lead to its rapid valuation expansion. Despite market adversities, the company held a healthy non-GAAP gross margin of 8.8% in Q1 through solid cost management and operational efficiency.

On the other hand, Sanmina repurchased2.1 million sharesfor $106 million in Q1. Furthermore, Sanmina invested $34 million in capital expenditures to support future growth initiatives. Fundamentally, Sanmina’s strategic capital allocation and focus on value expansion further support its growth potential. Hence, the company’s share repurchases signify the focus on boosting shareholder returns and efficiency in capital utilization.

Overall, Sanmina is investing in faster-growing and higher-margin end markets. These include cloud computing, defense, aerospace, medical digital health, electric vehicles, renewable energy, industrial, and optical packaging. Therefore, the favorable macrotrend may rapidly lift the company’s market lead in the upcoming quarters.

Sterling (STRL)

Sterling (NASDAQ:STRL) has solid revenue growth and margin expansion to support its valuation ascension. For instance, in Q4 2023, Sterling reported revenues of$486 million, marking an increase of 8% year-over-year (YOY). Additionally, for 2023, revenue increased by 11.5% over 2022. Hence, this consistent revenue growth demonstrates the company’s ability to capture market leads and execute its business strategies effectively.

On the other hand, Sterling’s backlog, as of Dec. 31, 2023, was $2.07 billion, suggesting a considerable boost of 46% over 2022. Furthermore, the combined backlog is hitting $2.37 billion, representing a solid growth of 40% YOY. Fundamentally, the expanding backlog indicates strong demand for Sterling’s services and provides visibility into future revenue streams. Hence, this reflects the company’s sharp project acquisitions and execution, enhancing market confidence in its growth prospects.

Despite a decrease in gross margin from15.4% to 9% in Q4, Sterling delivered endurance by improving its gross margin to 18.9% for 2023. The company’s capability to rebound and attain considerable margin expansion underscores its operational efficiency and costing strategies. Thus, this margin expansion leads to enhanced profitability and consolidated financial solidity.

At the bottom line, Sterling’s net income for 2023 surged to$138.7 million, a substantial increase from $96.7 million in 2022. Similarly, the adjusted net income also grew considerably, hitting $139.5 million in 2023 against $97.5 million in 2022. The growth in net income and adjusted net income reflects Sterling’s focus on bringing up the bottom line through edgy operational execution and prudent resource management.

Finally, Sterling provided progressive guidance for 2024. The company is projecting revenue from $2.125 billion to $2.215 billion. Similarly, net income growth may hit $155 million to $165 million. Therefore, the company’s optimistic outlook reflects its capability to capitalize on market leads, leverage its backlog, and derive continued value growth.

SoFi (SOFI)

SoFi’s (NASDAQ:SOFI) acceleration of revenue growth and bottom-line expansion will continue to boost its market valuation. For instance, Q4 2023 GAAP net revenue was$615 million, up +35% YOY. Similarly, adjusted net revenue for the same period was $594 million, up +34% YOY. Above all, the 2023 adjusted net revenue was $2.1 billion, reflecting a 35% increase from the previous year.

Fundamentally, accelerating the top-line is a fundamental strength for SoFi, which indicates boosting demand for its digital financial services. This growth reflects the company’s edge in attracting new members, expanding its products, and deriving monetization across its segments. Such constant and accelerating revenue growth is vital for sustaining the company’s rapid expansion and enriching valuations over the long term.

At the bottom line, margins significantly improve, indicating operational efficiency and scalability within its business model. The adjusted EBITDA for Q4 2023 was$181 million, up 159% YOY. Notably, contribution profit in the Financial Services segment for Q4 2023 was $25.1 million, up nearly eightfold from Q4 2022. Specifically, the adjusted EBITDA margin for Q4 2023 was 30%, reaching the long-term mark.

Moreover, expanding margins is vital for SoFi, as it directly contributes to the company’s bottom line and financial sustainability. By sharply managing costs and improving its operational edge, the company may continue to boost its overall performance and derive higher value. The constant margin improvement suggests SoFi’s capability to scale its business sharply while maintaining profitability.

Finally, the company attractednearly 585Knew members in Q4 2023, leading to a total member base of over 7.5 million by year-end. Therefore, this significant number is fundamental for SoFi, demonstrating its capability to attract and retain customers while expanding its market reach.

As of this writing, Yiannis Zourmpanos held a long position in SOFI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.