Top Tech Penny Stocks for 2019
The biggest winners in 2019 could very well be tech penny stocks. Why? The FAANG stocks might be hogging the limelight, but it’s impossible to beat the market when you are the market. That’s the joy of tech penny stocks; finding under-the-radar winners.
Now, some investors may simply be looking for cheap tech stocks or low-cost tech stocks, but you need to look at more than just the price to find penny stocks that could be the biggest winners in 2019.
The art of finding the best tech penny stocks in 2019 is no different to finding the best large-cap tech stocks, or any stock for that matter. Look at the company’s fundamentals, technicals, momentum, and market trends. That’s how you’ll find the top tech penny stocks in 2019.
Admittedly, momentum might not be the best indicator right now. The broader markets experienced a huge sell-off starting in October. And Wall Street hasn’t quite recovered yet. In fact, the S&P 500 and Dow Jones Industrial Average are on pace for their worst December since the Great Depression.
This means many great tech stocks are now trading at bargain prices while some tech stocks have now fallen into penny stock territory. The momentum may not be there right now, but the outlook for the best tech penny stocks remains robust for 2019.
Below then, are three tech penny stocks to watch in 2019. For the sake of inflation, penny stocks are, for this article, any equity that trades for under $10.00.
Tech Penny Stocks List
|Viavi Solutions Inc||NASDAQ:VIAV|
|Glu Mobile Inc.||NASDAQ:GLUU|
AEYE Stock Forecast
Eschewing Silicon Valley for the drier climes of Tucson, Arizona, Audioeye Inc (NASDAQ:AEYE) is a cloud-based digital accessibility company that helps reduce access barriers, expand access for those with disabilities, and helps web sites reach a broader audience. Meaning, it can help make web sites (and other online digital content) more accessible and easier to use for those with disabilities. An example would be controlling a web site through voice commands.
Web sites and other online platforms not designed for digital accessibility means 15% of the population cannot access digital content. This includes more than 41 million Americans and more than one billion people globally.
Chart courtesy of StockCharts.com
AudioEye’s share price has been mostly bullish for 2018, save for the tumble it took in late October and early November. This is in step with the broader market sell-off. Unlike the rest of the tech sector, AudioEye’s share price has been bullish, and there are more than enough good reasons to believe this momentum will continue in 2019.
On December 17, the company provided a solid outlook for fiscal 2018 and 2019. For fiscal 2019, AudioEye expects to report revenue in a range of between $11.0 million and $13.0 million. At the midpoint, this represents an increase of more than 100% over the expected 2018 revenue of $5.5 million to $5.7 million. (Source: “AudioEye Introduces 2019 Revenue Guidance of $11 Million to $13 Million,” AudioEye Inc, December 17, 2018.)
The company noted that monthly recurring revenue has grown by around $600,000. Cash contract bookings for fiscal 2019 are forecast to range between $20.0 million and $22.0 million.
Using the midpoint range, this represents an expected increase of more than 80% versus expected 2018 bookings of between $11.0 million and $12.0 million in 2018.
AEYE Stock Financials
On October 25, AudioEye reported its financial results for the third quarter ended September 30, 2018. Third-quarter revenue increased 101% year-over-year to a record $1.49 million and was up 21% quarter-over-quarter. Year-to-date revenue increased 108% year-over-year to $3.88 million. (Source: “AudioEye Reports Preliminary 101% Increase in Revenue to $1.49 Million and 88% Increase in Cash Contract Bookings to $2.80 Million for Third Quarter of 2018,” AudioEye Inc, October 25, 2018.)
For the first nine months of 2018, AudioEye secured a record $8.04 million in cash contract bookings, a 70% increase over the $4.74 million booked in the same year-ago period.
Deferred revenue for the third quarter of 2018 totaled a record $2.50 million, up 134% from $1.07 million in the same prior-year period.
“The third quarter was another successful period marked by continued execution as well as expansion for AudioEye,” said company CEO Todd Bankofier.
“More specifically, we achieved our eleventh consecutive quarter of increased revenue, which was driven by the strong performance of our rapidly developing partnership channel.” (Source: Ibid.)
Looking ahead, AudioEye expects full-year revenue to be between $5.0 million and $6.0 million. This represents a year-over-year increase of 83% to 119%.
The company also expects cash contract bookings to be between $11.0 million and $12.0 million, representing an increase of 75% to 90% compared to 2017.
At quarter-end, the company had $6.09 million in cash and cash equivalents and virtually no long-term debt.
VIAV Stock Forecast
Viavi Solutions Inc (NASDAQ:VIAV) is a great tech stock that can only be classified as a penny stock because it gave up so much ground during the October sell-off. Before the meltdown began, Viavi’s share price had advanced 46%. Currently trading at $10.07, VIAV is up 14.6% year-to-date but down 21% from its early October highs.
To put that into perspective, the S&P 500 is down 4.6% year-to-date and the tech-heavy Nasdaq is 1.7% in the red.
Viavi Solutions develops communications test and measurement instruments to test tools used by communications service providers, enterprises, network equipment manufacturers, civil government, military and avionics customers. The company’s technology can be found in virtually every major network and over 100,000 data centers worldwide.
Chart courtesy of StockCharts.com
Before the October sell-off, Viavi was bullish, trading well above its 50-day moving average. It recently hit a new 52-week high of $12.82. That changed in early October. While Viavi’s share price has lost 21% of its value, its outlook remains bright. It could be one of the big penny stock tech companies of 2019.
VIAV Stock Financials
On November 1, Viavi announced its financial results for the first quarter of fiscal 2019 ended September 29, 2018. First-quarter revenue came in at $268.5 million, a 40.6% increase over the $190.9 million recorded in the first quarter of 2018. (Source: “VIAVI Announces First Quarter Fiscal 2019 Results,” Viavi Solutions Inc, November 1, 2018.)
The company reported a first-quarter generally accepted accounting principles (GAAP) loss of $15.3 million, or $0.07 per share. In the first quarter of 2019, Viavi reported a loss of $0.03 per share.
Non-GAAP net income was $35.2 million, or $0.15 per share. In the first quarter of 2018, the company’s non-GAAP net income was $0.10 per share.
“We delivered solid results in fiscal Q1 2019, driven by better than expected demand in our key growth areas of Fiber, 5G wireless, and 3D Sensing,” said Oleg Khaykin, VIAVI’s President and CEO. “We expect fiscal Q1 business trends to continue into Q2.”
To that end, for second-quarter fiscal 2019 ending December 29, 2018, Viavi expects net revenue to be between $270.0 million to $290.0 million and non-GAAP earnings per share to be $0.15 to $0.17.
Subsequent to the end of the first quarter, Viavi completed the acquisition of RPC Photonics, Inc., a technology leader in engineered optical diffusers used in consumer electronics (3D Sensing), industrial automation, life sciences, and aerospace and defense systems. With this acquisition, Viavi significantly increases its 3D Sensing market opportunity.
GLUU Stock Forecast
Glu Mobile Inc. (NASDAQ:GLUU) is the tech penny stock that basically shrugged off the October meltdown. The company entered the year trading at $3.66 and on November 7, hit a new-52-week high of $8,42; for a then year-to-date gain of 130%. Currently trading at around $7.86 GLUU is up roughly 114% since the start of 2018 and continues to have excellent momentum.
Why the love for GLUU? It’s tough for mobile game addicts to turn off their phones. Glu Mobile is the name behind a large number of award-winning, popular, free-to-play games like “Cooking Dash,” “Covet Fashion,” “Deer Hunter 2018,” “Design Home,” “MLB Tap Sports Baseball 2018,” “Restaurant Dash with Gordon Ramsay,” and “Kim Kardashian Hollywood.”
Chart courtesy of StockCharts.com
Glu Mobile’s share price has been on a tear in 2018 and there’s no reason to think it won’t be as bullish in 2019. The company has been reporting strong revenue growth, is narrowing its losses, has a strong cash position ($84.0 million), and is debt free. It has also raised its guidance for four consecutive quarters.
The company already has a strong stable of games and is busy looking for the industry’s next winner. Should it come along in 2019, you should expect to see the company’s share price soar significantly higher.
GLUU Stock Financials
On November 6, Glu Mobile announced financial results for its third quarter ended September 30, 2018. Third-quarter revenue was up 22.4% year-over-year at $99.3 million. (Source: “Glu Mobile Reports Third Quarter 2018 Financial Results,” Glu Mobile Inc., November 6, 2018.)
The game maker reported a third-quarter loss of breakeven per diluted share compared to a loss of $0.09 per share in the same prior-year period.
Record bookings increased 17.5% year-over-year to $100.7 million. The company also raised its 2018 full-year bookings guidance to a range of $380.7 million to $382.7 million.
Glu ended the third quarter with cash and cash equivalents of $80.8 million. At the end of the third quarter of 2017, Glu had cash and equivalents of $62.9 million
CEO Nick Earl stated:
Glu continued the strong momentum established in the first half of the year as bookings reached a record level in the third quarter with another quarter of increased profitability on an adjusted EBITDA basis. These better than expected results were driven by continued strength in our Growth games and the improvements in our live operations and merchandising.
Eric R. Ludwig, Chief Operating Officer and Chief Financial Officer, said:
Our strong top line marks our seventh consecutive quarter of reporting improved year over year bookings growth…These improved financial results and our increased outlook for the full year put us on track for a record 2018 in terms of bookings, adjusted EBITDA profitability and free cash flow. We believe we remain on track to reach our long-term financial goals and are excited about our future.
There are a lot of great tech stocks out there that have been unjustifiably beaten down during the recent sell-off. Many of them have slipped into penny stock territory. For many investors, tech stocks that trade in the single digits are something to be avoided. This would be a big mistake.
As you can see, with a little due diligence, you can uncover some fundamentally strong tech penny stocks with strong product offerings, great technicals, and tremendous long-term growth potential.
The broader markets may be looking bleak, but with penny stocks, there’s always a bull market going on somewhere. And in 2019, there are a number of tech penny stocks that will significantly outperform the market.