Technology remains fertile ground for young companies to try their hand at putting new tech solutions on the market. That means investors will find plenty of penny tech stocks to choose from. To learn more about the process of trading penny stocks, Investopedia has a day trading course.

We have selected four penny tech stocks for you to consider. 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 September 12, 2017.

1. Zix Corp. (ZIXI)

Zix Corp. is an email provider. It 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, Zix 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 $282 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: 272,539
  • Market Cap: $282.42 million
  • PE Ratio (TTM): 42.58
  • EPS (TTM): 0.12
  • Dividend & Yield: 0.00 (0.00%)

2. Glu Mobile Inc. (GLUU)

Glu Mobile 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. Interestingly, its biggest selling game is reality TV star Kim Kardashian.

The company has worked its way out of debt and has strong cash reserves. Revenues have been rising over the past four quarters, but operating income is negative. Glu Mobile is spending on research and development to find its next hit.

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: 3,349,461
  • Market Cap: $475.31 million
  • PE Ratio (TTM): -4.39
  • EPS (TTM): -0.8
  • Dividend & Yield: N/A (N/A)

3. Arotech Corp. (ARTX)

This company has combined two of the hottest trends around today: 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.

Arotech 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 remains negative. That means investors who buy this stock are doing so based on the potential for both the company and the sector.

  • Avg. Volume: 201,317
  • Market Cap: $94.71 million
  • PE Ratio (TTM): -34.11
  • EPS (TTM): -0.11
  • Dividend & Yield: N/A (N/A)

4. Guidance Software Inc. (GUID)

This stock is technically above the penny stock range, but the recent dramatic breakout makes it worth noting.

Guidance 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 flat for the past four quarters, and operating income remains negative. However, analysts are predicting strong earnings-per-share growth and an uptick in sales.

  • Avg. Volume: 556,330
  • Market Cap: $218.17 million
  • PE Ratio (TTM): -29.30
  • EPS (TTM): -0.24
  • Dividend & Yield: N/A (N/A)

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.

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