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Summary
- Direct Digital Holdings Inc., a communication sector stock, reported an 87% year-on-year jump in its revenue for Q1 2023.
- Good Times Restaurants Inc., a quick-service and casual dining restaurants operator, reported a 3.5% increase in total revenues in Q2 2023.
- Heritage Global Inc., a financial services company, reported total revenue of US$16.61 million for Q1 2023.
While penny stocks are generally associated with lack of liquidity, and small company sizes, they can sometimes turn out to be extremely rewarding opportunities for investors. Penny stocks are priced lower than US$5 in the market, with some holding the potential to grow multifold.
Identifying these penny stocks forms the fundamental pillar of becoming a successful penny stock investor. The power of penny stocks becomes even more evident through real-life examples of large-cap companies like Amazon and Tesla, that once originated as penny stocks.
At the same time, investors should not forget that most penny stocks do not offer the dependability that is seen in most large- or mid-cap stocks. One of the key criteria to screen quality penny stocks is their recent financial performance, which can be used to gauge how well the company may perform in the market.
On that note, here are three penny stocks that have seen year-on-year growth in their recent quarterly revenues:
Direct Digital Holdings Inc. (NASDAQ:DRCT)
DRCT is primarily a communication sector stock, with its focus area being advertising. Direct Digital is an advertising platform, focused on providing technology and data-related solutions in the field.
DRCT reported an 87% year-on-year jump in its revenue for Q1 2023 to US$21.2 million. Direct Digital’s operating income for Q1 2023 was US$2.8 million, as compared to US$1.7 million in Q1 2022. This marked an increase of 61% year-over-year in the operating income for Q1 2023.
Image source: ©2023 Kalkine®; Data source: Company Reports
For full fiscal year 2023, DRCT expects its revenue to fall in the range of US$118 million to US$122 million, or a 36% year-over-year growth at the mid-point.
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Based on Tuesday’s closing price of US$2.64, DRCT has a P/E ratio of 7.07x.
The stock rose 3.2% on a YTD basis as at the close of trade on August 8, 2023.
Good Times Restaurants Inc. (NASDAQ:GTIM)
Good Times Restaurants owns and operates quick-services drive-through restaurants and casual dining outlets. The company also franchises its hamburger-oriented quick-service restaurants.
Image source: ©2023 Kalkine®; Data source: Company Reports
For Q2 2023, Good Times Restaurant reported a 3.5% increase in total revenues to US$34.8 million, compared to Q2 2022. Meanwhile, restaurant sales for the quarter were US$34.56 million, as compared to US$33.36 million in Q2 2022.
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Based on Tuesday’s closing price of US$2.86, GTIM has a P/E ratio of 3.51x.
On a YTD basis, the stock is up 24.35% as at the close of trade on August 8, 2023.
Heritage Global Inc. (NASDAQ:HGBL)
Heritage Global offers financial services, which include acquisition, valuation and lending for surplus and distressed assets. Heritage Global’s specialty lies in advisory services and brokering turnkey manufacturing facilities.
The financial sector company reported total revenue of US$16.61 million for Q1 2023, as against US$9.35 million for Q1 2022. Meanwhile, the company’s operating income was US$3.89 million in Q1 2023, compared to US$0.875 million in Q1 2022.
Image source: ©2023 Kalkine®; Data source: Company Reports
Heritage Global’s net income in Q1 2023 was US$2.83 million, higher than Q1 2022’s US$0.645 million. The company states that increased spending in the post-Covid period has led to higher consumer debt and a greater number of loans materializing.
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Based on Tuesday’s closing price of US$3.74, HBL has a P/E ratio of 7.67x.
On a YTD basis, HGBL rose 59.15% and saw a monthly gain of 8.09% as at the close of trade on August 8, 2023.
