2 Stocks Below $5 to Consider Buying
Stocks below $5.00 are usually priced that way for a reason. The bear market has really beaten down some of these stocks to the point where they may not ever return to previous levels. Remember a stock’s price typically does not dictate if it is a good or bad company, although most stocks trading for under $1.00 are usually considered risky penny stocks.
The last time I wrote an article like this I recommended companies like SoFi (NASDAQ: SOFI) and Palantir (NYSE: PLTR). Since then those stocks have performed pretty well, gaining 105% and 140% respectively over the past six months. I’m not taking any credit, but it does show that these beaten-down stocks do have the ability to bounce higher. The $5.00 price level is a difficult one to analyze stocks at, so it’s not always easy to choose which low-priced stocks will make a return rally. Either way, it’s a fun exercise, so here are 2 stocks below $5.00 to consider buying.
Matterport (NASDAQ: MTTR)
This stock has been battered since it went public via a SPAC merger in 2021. Matterport has struggled since then as the business has suffered as both the commercial and residential real estate markets have slowed down. In fact, the business has slowed so much that Matterport saw a steep decline in subscription revenue growth from 2021 to 2022. One of the problems Matterport faces is the freemium model which allows users to use the platform for free if they only use one digital twin. Matterport still counts this towards its subscription count, even though they are not making any revenue from them.
On the bright side, Matterport said the magic words earlier this week: AI. The company is implementing a Genesis AI service to help users more accurately build their digital twin. The service will utilize Matterport’s more than 30 billion square feet of physical space. Is this AI release the breakthrough Matterport investors were waiting for? Time will tell, but I think that given the future resurrection of real estate and the new AI service, Matterport is worth a small wager at just over $3.00 per share.
Marqeta (NASDAQ: MQ)
I’ve also written about Marqeta before and admittedly, it has continued to fall. Sometimes it is as easy as reading the sentiment for the sector. Fintech stocks have been decimated over the past couple of years. Just look at Paypal (NASDAQ: PYPL) and Block (NYSE: SQ) which are often considered the two leaders in the industry.
For Marqeta it will be a challenge but this company has always had the potential for massive growth. Essentially, Marqeta operates between traditional credit card companies and payment processors. It has a healthy war chest of cash with no long-term debts and a plan in place to reduce expenses moving forward. EIther of these stocks could go to zero eventually, but the upside for Marqeta remains enticing, especially as the other players in the industry remain beaten down. If I’m taking a risk on any fintech company to explode higher, it’s Marqeta.
Rate this article