Amidst the plethora of investment prospects, some stocks stand out as enormous icebergs, ready for rapid expansion. Here are three under $10, which all have the potential to generate 10x returns by 2026. These businesses exist a variety of industries: consumer finance, semiconductors and technology hardware. However, they all have encouraging financial results and well-thought-out strategic positioning.
The first one’s lending division is its strong suit, with excellent revenue growth and profitability fueled by higher margins and a spike in loan originations. On the other hand, the second one continues to expand steadily in revenue, especially in its metal payment card business, even in the face of global economic uncertainty. Finally, the third one has seen an incredible rise in income by utilizing cutting-edge technologies to meet the increasing need for electric vehicle (EV) chargers.
Read more to explore the financial complexities and tactical approaches of every company. Learn the drivers behind their expansion paths.
SoFi (SOFI)
Lending, a pivotal component of SoFi’s (NASDAQ:SOFI) business strategy, significantly boosts its revenue and profit margins. SoFi’s competitive edge and growth prospects in the lending sector are highlighted by its high performance in the Lending segment. Thus, strong loan originations and growing profitability mark this.
Moreover, SoFi announced total loan originations of $17.7 billion in Q4 2023, a 29% year-over-year (YoY) increase. Strong demand for mortgage products, personal loans and student loan refinancing drove this increase, demonstrating SoFi’s capacity to draw customers from various lending categories.
In addition, SoFi’s Q4 net interest margin of 6.02% showed growth YoY and sequentially. The increase in net interest margin is evidence of SoFi’s skillful handling of interest revenue and costs, which boosts profitability and valuation. SoFi recorded a positive adjusted EBITDA of $432 million for 2023, a significant 201% rise from the previous year. Adjusted EBITDA improved significantly, demonstrating SoFi’s profitability and valuation.
Lastly, through its robust brand, technologically advanced platform and data analytics capabilities, SoFi is persistently growing its market share in the lending industry. Overall, these factors promote steady increases in loan originations and profitability.
CompoSecure (CMPO)
Quarterly and annual performance for CompoSecure (NASDAQ:CMPO) delivered a pattern of steady top-line growth. Net sales increased by 7% during Q4 2023, from $93.8 million to $99.9 million, indicating a high growth rate. Considering the difficulties caused by the unpredictability of the macroeconomy, this development is quite noteworthy.
Indeed, this is primarily due to CompoSecure’s metal payment card business’s ongoing domestic expansion. This rise surpassed the previous quarterly record, achieved in Q3. The 9% YoY rise in domestic net sales demonstrates the strength of CompoSecure’s position in its key market. Looking forward, the company continued to expand, even with a little 3% gain in net sales for 2023 over the prior year, reaching $390.6 million from $378.5 million.
Finally, a reduction in the total leverage ratio from 2.6x in 2022 to 2.35x in 2023 indicates better debt control and higher profitability than debt. Hence, progress in lowering secured debt obligations may be seen in the secured debt leverage ratio decline, which went from 1.62x in 2022 to 1.39x in 2023.
Navitas (NVTS)
Navitas’s (NASDAQ:NVTS) performance signifies that the company has seen significant top-line growth. Navitas had record revenue in Q4 2023, with $26.1 million. Comparing this to the fourth quarter of 2022, when sales were $12.3 million, led to a stunning 111% rise. In addition, sales increased sequentially from the $22 million revenue in Q3 2023 by 19%.
Furthermore, the solid increase in sales from the previous year highlights Navitas’ solid performance and rising customer demand for its goods. The 19% sequential increase highlights the company’s capacity to maintain pace and seize market possibilities even further.
Moreover, Navitas generated $79.5 million in total revenue for 2023, a massive 109% increase over the prior year’s $37.9 million sales. Navitas’s significant revenue growth indicates the company’s fundamental capacity to increase its market share and steadily satisfy rising client demand.
To sum up, the demand for EV onboard and roadside chargers has been boosted as a result of Navitas’ introduction of cutting-edge technologies, including Gen-3 Fast silicon carbide and GaNSafe. Therefore, collaborations with leading EV manufacturers such as Zeekr, Volvo (OTCPK:VOLAF), and Smart (OTCPK:MBGAF) highlight Navitas’ dominant position in this quickly expanding market niche.
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.com Publishing Guidelines.