Technology remains fertile ground for young companies to try their hands at putting new tech solutions on the market. That means investors will find plenty of penny tech stocks to choose from.

A penny stock is any stock that is priced under $5 per share. We have selected four penny tech stocks for you to consider for 2017. These stocks were chosen based on their positions in their industries. In other words, we looked for stocks that have the potential to capture market share.

All figures are current as of 4-18-17.

Zix (ZIXI)

This is an email provider. Zix focuses on secure messaging, marketing itself to corporate and government entities. The unique approach of encryption coupled with avoiding downloading makes this an attractive service.

With sales rising 65% in five years, the company is making headway. It tends to range in and out of the penny stock category as it rises over $5 per share on occasion. As you might expect , the company is very small, with a market cap of just over $270 million. Revenues have been increasing steadily over the past four years. With earnings per share in the positive column, this stock shows promise for investors who are willing to take on the risk of a penny stock.

Avg. Volume 249,508

Market Cap: 270.36M

EPS (TTM): 0.11

Dividend & Yield: N/A

1y Target Est.: 5.75

Glu Mobile (GLUU)

Glu makes games for smartphones. It has multiple titles that are gaining popularity for players who use phones or tablets. Many of the titles are based on action movies, while others are based on existing console games. Its biggest seller is “Kim Kardashian.”

The company has worked its way out of debt and has strong cash reserves. Revenues have been flat over the past four quarters, and operating income is negative. The company is spending on research and development to find its next hit that will be comparable to “Kim Kardashian.”

See which online broker offers the best tools for analyzing the technology industry by visiting our Brokerage Review Center.

The potential for this stock is based on its industry. Games continue to grow in popularity, and gamers are willing to try new games, even if they are not from large companies. Glu Mobile could come up with a hit game that will send the stock soaring.

Avg. Volume: 5,664,512

Market Cap: 304.46M

EPS (TTM): -0.66

Dividend & Yield: N/A

1y Target Est: 2.66

Arotech Corporation (ARTX)

This company has combined two of the hottest trends: drones and virtual reality. It creates technology for the military and law enforcement. It offers training simulations for use-of-force training. It also sells to the security and emergency services sectors. It offers weapons simulations and aircraft and missile systems.

The company has positioned itself as a significant provider of surveillance and attack technologies at a time when drones are gaining increased attention, and artificial intelligence is being deployed.

Revenues have not grown in the past four quarters, and the company’s operating income is currently negative. That means investors who buy this stock are doing so based on potential for both the company and the sector.

Avg. Volume: 462,319

Market Cap: 83.75M

EPS (TTM): -0.11

Dividend & Yield: N/A

1y Target Est: 4.75

Guidance Software (GUID)

This stock is technically just above the penny stock range, but it appears that it will drop in price a bit more before it turns around.

The company sells software for digital investigations. This software is used by law enforcement and corporations to search networks and collect data from those networks. In short, the company is in the cyber-security business, at a time when this sector is red hot.

Revenues have been climbing for the past four quarters, but operating income remains negative. However, analysts are predicting strong earnings-per-share growth and an uptick in sales. With a target price of $9.10 and a current price of $6.17, the company could provide investors with significant profits.

Avg. Volume: 91,498

Market Cap: 199.86M

EPS (TTM): -0.72

Dividend & Yield: N/A

1y Target Est: 9.10

The Bottom Line

The trouble with penny stocks is you have to make some guesses about the future. Very few penny stocks have a strong enough track record to indicate they will survive and prosper. That said, the penny stocks on our list are in significant industries and have the potential to be vital players in those industries.


Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.