High-risk penny stocks have long tempted investors with the potential for significant returns.
However, it is crucial to acknowledge the inherent risks associated with these speculative investments. If you’re investing in high-risk penny stocks, prepare for an exhilarating journey.
It’s crucial to acknowledge the inherent risks involved in these speculative investments. This article will focus on three high-risk penny stocks with the potential for significant wealth accumulation.
If you’re attracted to the allure of penny stocks, it’s vital to approach them with caution and conduct thorough research. While some penny stocks may present exciting growth prospects, others are filled with uncertainties and risks.
23andMe Holding Company (ME)
23andMe (NASDAQ:ME), a prominent genetic testing services company, has embarked on expansion endeavors.
However, these initiatives have not been well-received by shareholders. The company’s stock has plummeted by approximately two-thirds of its value since its IPO.
The company’s ambitious business expansion plan requires a long-term perspective. The company’s genomic health services unit may take another five to seven years to develop into a significant revenue driver fully.
Despite the cutting-edge nature of 23andMe’s platform, it faces challenges in the outdated medical services sector.
On the clinical front, 23andMe utilizes its extensive consumer genetic database to discover and advance innovative oncology treatments. This initiative resulted in a research agreement with GSK in 2018, further extended in January 2022. However, this third pillar of 23andMe’s value proposition will unlikely deliver significant results shortly.
Analysts project a 165% potential increase for this genomic healthcare stock by 2024. However, the company lacks visible catalysts to achieve this target within that timeframe.
23andMe’s appealing valuation, industry-leading consumer genetic database and ventures into personalized medicine make it an attractive acquisition candidate.
Bionano Genomics (BNGO)
Bionano Genomics (NASDAQ:BNGO) is a small-cap company specializing in genome analysis solutions.
Bionano’s core operations revolve around optical genome mapping (OGM), diagnostic services, and software. Bionano specializes in selling the Saphyr system, an automated platform designed for optical genome mapping of ultra-high molecular weight DNA.
The Saphyr system advances genetic research by analyzing clinically significant structural variations.
Besides its core business in optical genome mapping (OGM), Bionano also offers specialized diagnostic testing services designed for patients diagnosed with autism spectrum disorder and other neurodevelopmental disabilities. Bionano operates its BioDiscovery business, which analyzes next-generation sequencing and microarray data.
From a financial standpoint, the company’s life science research division has showed consistent growth in recent quarters, with a remarkable 55% surge in sales during Q3 compared to the previous year’s period.
Despite the impressive growth rate, Bionano’s shares have experienced a significant decline of 51% in value this year.
Investors have shown reluctance towards this life sciences research stock due to factors such as intense competition in the market for OGM devices and services, the ongoing development of this market, and the company’s failure to achieve break-even in its life cycle.
Wall Street’s average price target suggests a remarkable upside potential of 352% for this penny healthcare stock. However, Bionano’s management must convince investors that their OGM platform will become the industry standard in an $8 billion market.
In 2023, Precigen (NASDAQ:PGEN), a clinical-stage company, is garnering high expectations from Wall Street analysts.
The average price target is $8.77 on last look, translating into over 618% upside. The company’s strong potential lies in its two core platforms, UltraCAR-T and AdenoVerse, designed to tackle key cell and gene therapy obstacles.
UltraCAR-T, for instance, can significantly shorten the delivery time of advanced anti-cancer cell therapies from weeks to a mere day. On the other hand, AdenoVerse holds the promise of creating potent genetic therapies for challenging medical conditions across a diverse range of indications.
What are the risks involved? Precigen will encounter the challenge of obtaining sufficient financing. In 2023, Precigen may explore a public offering or a licensing agreement for one of its clinical candidates.
Regarding retail shareholders, a licensing deal would be more favorable. However, depending on the agreement’s specifics, Precigen’s substantial value proposition could be diminished.
Precigen has multiple value drivers in its pipeline, making it a potentially lucrative opportunity for investors with a higher tolerance for risk.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.