Purchasing stocks for less than $20 might be a wise choice for investors looking to make large gains without making big initial commitments. These three under-$20 stocks show promise. These businesses all exhibit distinct advantages and promising future growth, which attract investors.
The first one is in the pharmaceutical industry and demonstrates financial stability with a consistent boost in royalties and product sales income. Strategic share repurchases and a healthy cash position demonstrate the company’s sound financial standing. It also reflects the focus on increasing shareholder value.
Meanwhile, the second one is a titan of the film and entertainment industries. It has an impressive box office record and a substantial worldwide presence. Its great brand appeal and successful marketing efforts represent its ability to take a sizable market share despite having fewer screens.
Finally, the third application software supplier shows remarkable development regarding average revenue per user, gross payment volume, and adjusted EBITDA. Its capacity to draw in well-known customers and raise customer retention rates is a measure of its competitiveness in the market and quality service provision.
Under-$20 Stocks: Innoviva (INVA)
Glaxo (NYSE:GSK) paid Innoviva (NASDAQ:INVA) $61.9 million in gross royalties in Q1 2024, as opposed to $60.3 million in Q1 2023. The steadily increasing royalty revenue shows consistency and dependability in generating cash. This is essential for maintaining operations and financing upcoming projects.
Further, in Q1, net product sales and licensing revenue were $19.1 million, mostly from core items such as GIAPREZA, XERAVA, and the recently released XACDURO. The company’s capacity to efficiently commercialize its goods, penetrate markets and fulfill expanding demand is reflected in the 66% year-over-year (YOY) boost in net product sales. Hence, this growth trajectory positively impacts the company’s market positioning and product acceptability.
Moreover, Innoviva completed the buyback program by repurchasing an additional 0.4 million shares for around $5.3 million by April 25, 2024, having already paid $9.7 million for 0.6 million shares of its outstanding common stock. Thus, repurchasing shares reflects the company’s potential and focus on increasing market value.
Lastly, having a solid cash position — $178.4 million as of March 31, 2024 — allows for flexibility and stability for upcoming operations and strategic moves.
IMAX (IMAX)
IMAX (NYSE:IMAX) has an enormous global reach, operating in almost 90 countries and territories. In Q1 2024, the company’s global box office was $261 million, its third-highest Q1 ever. This solid showing is evidence of IMAX’s popularity and commercial success in the entertainment industry.
Moreover, in Q1, IMAX had its largest quarterly market share ever in North America. It takes home 5.9% of the total domestic box office space while only having 1% of the country’s screens. This demonstrates IMAX’s capacity to increase its market share and draw in viewers steadily. In Q12024, IMAX earned a solid 3.4% of the worldwide box office. Hence, this further demonstrates its increasing prominence on a global basis.
Additionally, IMAX exceeded market forecasts by generating $79 million in sales for Q1. The business delivered solid profitability, with a total adjusted EBITDA margin of 40.5% and a gross profit margin of 59%. Thus, these numbers demonstrate IMAX’s capacity to attract large amounts of money and maintain a sharp financial standing.
Overall, the company’s net income reached $3.3 million, up 33% YOY. Indeed, the boost in profits is attributed to IMAX’s proficient strategies and operational edge.
Lightspeed (LSPD)
In Q4 fiscal 2023, Lightspeed (NYSE:LSPD) delivered an adjusted EBITDA loss of $4.3 million. Against that, the company’s $4.4 million adjusted EBITDA was positive in Q4 2024. Adjusted EBITDA for fiscal 2024 increased by $35.1 million to $1.3 million, marking the first time the yearly adjusted EBITDA has been above red.
Moreover, these increases in adjusted EBITDA show the edge as Lightspeed is getting closer to profitability and effective cost control. This strengthens its balance sheet and makes it more appealing to investors. From 19% in Q4 2023 to 32% in Q4 2024, the gross payments volume (GPV) as a percentage of gross transaction volume (GTV) grew. Indeed, this boost indicates that more of Lightspeed’s clients are using its payment options.
Further, Lightspeed Payments processes a sizable amount of this volume, demonstrating both the platform’s expanding reach and the success of its unified payments program. Similarly, the average revenue per user (ARPU) rose to about $431, a 29% YOY boost. Hence, this increase suggests that Lightspeed is increasing client value and successfully upselling its services.
Finally, by keeping a net retention rate close to 110%, the business demonstrates its capacity to hold onto and increase income from current clients.
On the date of publication, Yiannis Zourmpanos did not hold (either 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 Guideline.