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Not all profits have to be made off the big names like Apple Inc. (NASDAQ: AAPL) or Amazon.com Inc. (NASDAQ: AMZN). While those big names tend to dominate the headlines, the smaller, often overlooked companies can land the same - or even bigger - gains.
Chris Johnson, Quantitative Specialist for Money Morning, views penny stocks as the perfect plays for these big moves. "I'm talking shifts of 100%, 200%, 300% in a matter of days," says Chris.
And right now, there's one such penny stock that could rocket 177% higher.
Inpixon (NASDAQ: INPX) is a speculative stock. The company has a five-year growth of -32.60% and negative net income of -$35.60 million. On the surface, things don't look great. It's easy to understand why Wall Street and institutional investors are overlooking the stock.
But when we take a closer look, we see a stock on the verge of a triple-digit breakout.
With recent strength in this company's fundamentals and a cheap price to boot, this under-the-radar penny stock could mount a turnaround that doubles the stock price.
A Penny Stock with Growth Potential
Inpixon is righting its course. The result of its efforts: Over the past two years, the company has managed to grow its annual revenue by 68% and 48%, respectively. And its current year-over-year revenue is up by 63%.
But here's where Inpixon gets more interesting...
The company specializes in using its patented technologies, 3D mapping, sensor analytics, and the Internet of Things (IoT) to gather indoor location data. In short, it's creating "smart" offices.
These "smart" offices can be automated based on people's locations. Desks and rooms can be reserved via an app - a huge bonus for hybrid remote work situations. Live maps show you where colleagues are in real time. And companies can use location and movement data to improve efficiency. Retailers can use that same data to maximize sales by tracking customers in their stores to improve traffic or duration and frequency of visits.
And these workspaces also have improved security within buildings by creating a wireless detection system to better prevent property and data theft, as well as physical intrusions. Both of these are going to be important for businesses as we rely more and more on different technologies and cloud-based systems.
Plus, they're about to get a major catalyst. The work-from-home movement has changed what offices are going to look like once the pandemic is over. This company could be the big winner of that change.
Its business might have taken a hit when the global lockdown started, but it's going to reap the rewards of an even bigger boost as more companies begin to adopt remote work and hybrid office policies. Take desk hoteling as an example. Employees don't have a permanent desk, but rather they reserve one on the days they decide to go into office, a system Inpixon specializes in.
Sales the two previous years were up 137% and 51%, respectively. Inpixon should have no problem increasing sales back to those levels, if not higher.
And here's the thing...
Despite Recent Struggles, Inpixon's Balance Sheet Is Strong
Inpixon was hurt by the pandemic, but management kept the company in great shape. The company didn't get bogged down with debt, and it has a great growth trajectory coming out of the pandemic. Right now, the stock is a steal.
The company's debt-to-equity ratio is low at 0.04, which is pretty great when compared to the average of 1.5. Its earnings per share (EPS) are expected to grow 97.9% by the end of 2021, with a gross margin at 71%. Considering the average gross margin for most tech and software companies today is around 70%, Inpixon is right on track.
All of this is to say that Inpixon is moving in a profitable direction.
It has excellent market value compared to its book valuation with a price-to-book (P/B) ratio of 0.70. P/B ratios under 1 are considered solid investments. And the company has quick ratio of 8.60. That means that Inpixon is able to more readily pay any debts in the upcoming year. And that puts Inpixon in a great spot - a quick ratio of 1 is the breakeven, more or less. Anything under 1 means an inability to cover those payments.
Inpixon also announced that it will work on three major contracts moving forward, one of which is for the company's smart office app, selected by a major European-based commercial and retail banking firm with more than 50,000 employees and more than 75 locations for seven figures over a two-year period.
The goal of Inpixon's app is to offer an enhanced work experience for employees regardless of whether they're remote or working from the office. And it will offer desk booking and conference room booking, hoteling, indoor navigation, news and event feeds, and employee notifications for a seamless workplace experience.
This is a no-brainer for companies like Facebook and Google, which have delayed their return-to-office plans due to the delta variant of the coronavirus.
Take Google, for example, who recently revised its plans to extend its global voluntary work-from-home policy. The tech giant has reopened campuses to those who feel safe enough to go into the office, in turn introducing a hybrid environment. If employees had access to a smart office app such as Inpixon's, they could easily transition from home to office and back.
And that increased spread of the delta variant could push the shift for hybrid work environments to happen sooner - giving Inpixon the momentum to move its value higher.
Inpixon Stock Is a Top Penny Stock to Buy Now
All of this is to say that Inpixon is moving in the right direction.
The company has a handle on the fundamentals and is at work to improve its overall profitability to put those rough years behind it. For now, Inpixon remains an almost unseen blip on the radar of bigger institutions. That doesn't mean we can't capitalize on its coming growth.
Inpixon is a high-risk, high-reward investment.
With current support levels at $0.92, Inpixon shouldn't move much lower than its current cost of $0.98 per share. If all the financials align, it's likely the stock could hit the $1.30 mark for a 25% gain. It's possible, though, for the stock to move even higher and hit previous 52-week highs of $2.89 - a gain of 177%.