The technology sector consists of businesses that develop, build, and market consumer electronics, electronic components, and software. Companies in the tech sector may also provide information technology (IT) services such as cloud computing. While the best-known companies are giants like Apple Inc. (AAPL) and Microsoft Inc. (MSFT), there also are tech businesses that are classified as penny stocks. Penny stocks typically trade at $5 per share or less. Investing in penny stocks can be especially risky and may entail higher trading costs. Investors should therefore be careful when considering whether to invest in these or similar securities.
There is no widely-used benchmark for tech penny stocks, and their performance has varied significantly over the past 12 months. However, the Invesco S&P SmallCap Info Tech ETF (PSCT) provides a general indicator for tech penny stocks. PSCT has underperformed the broader market in the past year, providing a 1-year trailing total return of 10.0% compared with 21.0% for the Russell 1000 Index. These market performance numbers and all statistics in the tables below are as of Jan. 13, 2022.
Here are the top three tech penny stocks with the best value, the fastest growth, and the most momentum, respectively.
These are the tech penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.
|Best Value Tech Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/S Ratio|
|Exela Technologies Inc. (XELA)||0.55||101.7||0.0|
|SOS Ltd. (SOS)||0.84||205.1||0.2|
|Boxlight Corp. (BOXL)||1.14||70.8||0.4|
- Exela Technologies Inc.: Exela Technologies is a business process automation company. It offers software and services for accounting, human resources management, and other services. On Jan. 12, the company announced the latest of several new contracts and partnerships: it will expand its existing relationship with Mastercard Inc. (MA) in Europe to support the automation of 11 million Giro payments and processing in Norway by using Exela's XBP platform. Giro payments are a way of directly transferring funds from one bank account to another without using physical checks. The terms of the updated partnership were not provided.
- SOS Ltd.: SOS Ltd. is a China-based holding company. Through subsidiaries, SOS offers financial services, including consumer credit, emergency rescue services, as well as insurance products. The company provides a consumer lending marketplace for customers in China.
- Boxlight Corp.: Boxlight provides interactive technology solutions including displays, collaboration software, and audio and campus communication solutions. The company serves schools, businesses, and governments. For Q3 2021, ended Sept. 30, Boxlight reported net income of $0.7 million as compared with net loss for the prior-year quarter. Revenue soared 544%. (YOY). Revenue gains were primarily driven by the acquisition of Sahara in Sept. 2020 and increased customer demand.
These are the tech penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors pick out growing startups that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability. Companies with sales growth of 2,500% or more have been excluded from our list as outliers.
|Fastest Growing Tech Penny Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|Desktop Metal Inc. (DM)||4.35||1,353||906.6|
|Boxlight Corp. (BOXL)||1.14||70.8||543.7|
|KULR Technology Group Inc. (KULR)||2.65||277.6||339.1|
- Desktop Metal Inc.: Desktop Metal manufactures 3D printers and related equipment used to build complex parts. The company serves industries including aerospace, healthcare, consumer products, and heavy industry. On Nov. 15, 2021, Desktop Metal reported financial results for Q3 2021, ended Sept. 30. The company reported dramatically widening net losses YOY on more than 900% revenue growth. Desktop Metal attributed the revenue growth to the strength of its core metals business and contributions from recent acquisitions.
- Boxlight Corp.: See company description above.
- KULR Technology Group Inc.: KULR Technology Group is a holding company which, through its subsidiary KULR Technology Corp., develops and commercializes thermal management technologies. The company's technologies focus on electronics, batteries, and other components for aerospace, military, and commercial applications.
These are the tech penny stocks that had the highest total return over the last 12 months. Stocks with returns in excess of 2,500% have been excluded as outliers.
|Tech Penny Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Phunware Inc. (PHUN)||2.79||268.6||130.6|
|KULR Technology Group Inc. (KULR)||2.65||277.6||100.8|
|Marin Software Inc. (MRIN)||3.57||55.3||58.7|
|S&P SmallCap Info Tech ETF (PSCT)||N/A||N/A||10.0|
- Phunware Inc.: Phunware provides software platforms used to engage, manage, and monetize mobile applications portfolios. Its products include cloud-based mobile software licenses, software development kits, cloud computing solutions, and related offerings. In January, Phunware introduced four newly optimized personal computers that are made specifically for high-end gamers, traders, streamers and cryptocurrency miners in conjunction with the Consumer Electronics Show (CES) in Las Vegas. The new PCS are: LYTE Gaming Series, LYTE Trading Series, LYTE Streaming Series, and, LYTE Mining Series..
- KULR Technology Group Inc.: See company description above.
- Marin Software Inc.: Marin Software is a digital marketing software company. It provides software-as-a-service, an advertising management platform, and related products and services. In January, Marin announced it had added LinkedIn Marketing Solutions campaign capabilities to its MarinOne platform. This integration gives advertisers improved insights and performance for of their LinkedIn campaigns through machine learning and automation.
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YCharts. "Financial Data." Accessed Jan. 17, 2022.
Exela Technologies Inc. "Exela Expands Mastercard Relationship in Europe." Accessed Jan. 17, 2022.
Boxlight Corp. "Boxlight Reports Third Quarter 2021 Financial Results." Accessed Jan. 17, 2022.
Desktop Metal Inc. "Desktop Metal Announces Third Quarter 2021 Financial Results." Accessed Jan. 17, 2022.
Phunware Inc. "Phunware Announces Two Strategic Supplier Relationships and Optimized PC Series for CES." Accessed Jan. 17, 2022.
Marin Software Inc. "Marin Software adds Support for LinkedIn Marketing Solutions." Accessed Jan. 17, 2022.