The stock market’s largest players – companies like Nvidia and its trillion-dollar peers – often dominate the headlines and attract most of the capital. Yet, some of the most compelling opportunities can be found at the smaller end of the market. While mega-cap shares trade at valuations that leave limited room for outsized gains, penny stocks carry the kind of growth potential that many investors find especially appealing.
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The ‘pennies’ are stocks priced down in the bargain basement, below $5 per share, and that ultra-low starting point means that even a small gain in absolute value will quickly translate into triple-digit percentage gains.
That doesn’t mean, however, that investors should just uncritically buy into the pennies. These shares are usually priced low for a reason, and if that reason comes down to fundamental unsoundness, then it’s time to steer clear. But for the penny stocks with strong potential, the rewards can be impressive.
The real challenge is knowing how to identify them. That’s where Wall Street analysts come in, using their research and experience to sift through the noise and highlight the penny stocks with the potential to grow into far more valuable investments.
With this in mind, we used TipRanks’ database to spot two penny stocks earning top marks from analysts right now. Both carry ‘Strong Buy’ consensus ratings and offer triple-digit upside potential – including one that could jump 840%. Let’s break down the bullish case and see what makes these picks stand out.
Protara Therapeutics (TARA)
The first penny stock we’ll look at is Protara Therapeutics, a clinical-stage biotech company focused on developing treatments for cancer and rare, life-threatening diseases. The company’s pipeline currently features two drug candidates: TARA-002, its lead program, which is being evaluated for non-muscle invasive bladder cancer (NMIBC) and lymphatic malformations (LMs), and IV Choline Chloride, designed to support patients who require parenteral nutrition.
What sets TARA-002 apart is its novel approach. This cell therapy is derived from a cell bank of genetically distinct Streptococcus pyogenes, already approved in Japan as the broad immunopotentiator OK-432. The therapy works through a dual mechanism – directly killing tumor cells while also stimulating an immune response known as immunogenic cell death, thereby amplifying antitumor activity.
On this foundation, Protara is advancing TARA-002 in NMIBC through a mid-stage study called ADVANCED-2. The trial is testing the therapy in patients who either failed to respond to the standard BCG treatment or who have never received it. Early findings have been promising: in the BCG-unresponsive group, all patients achieved complete remission at six months, with several maintaining that response over longer follow-up. Among BCG-naïve patients, the majority also showed strong responses, and some remained cancer-free for at least half a year. Just as important, the treatment has demonstrated a favorable safety profile to date. Protara plans to deliver interim results from ~25 six-month evaluable BCG-unresponsive patients in 1Q26.
The company is also pushing TARA-002 beyond oncology into rare pediatric diseases. In lymphatic malformations, TARA-002 is being evaluated in the Phase 2 STARBORN-1 trial, which is dosing pediatric patients (from six months to under 18 years) with macrocystic and mixed cystic LMs. The first cohort has been completed, and in that small group, two out of three patients (one with a macrocystic LM and another with a ranula) achieved a complete response after just one injection, and the therapy was generally well tolerated. Investors won’t have to wait long – Protara plans to deliver an interim update in 4Q25.
Rounding out the pipeline is IV Choline Chloride, the company’s phospholipid substrate replacement therapy for patients dependent on parenteral support (PS), who cannot obtain sufficient choline through oral or enteral nutrition. Protara’s earlier THRIVE-1 observational study underscored the unmet need, showing that most PS patients were choline-deficient and many displayed signs of liver injury. To address this gap, the company has advanced IV Choline Chloride into THRIVE-3, a Phase 2b/3 registrational trial now underway. The study begins with a dose-confirmation stage before expanding into a randomized, placebo-controlled portion, with dosing of the first patient now taking place.
With TARA shares trading at $3.19 apiece and TARA-002 showing encouraging signs, TD Cowen analyst Stacy Ku believes now is the time to get on board.
“Protara is making progress, with key updates in the next 6+ months. The most significant opportunity for ‘002 is NMIBC, with a high unmet need to avoid cystectomy… Recall, TARA-002’s 67% 12-month CRR in BCG-unresponsive NMIBC patients appears competitive, with a clean safety profile. Although early, the efficacy looks promising for the Q1:26 Phase II futility analysis in BCG-unresponsive patients… While our focus is on TARA-002’s progress in NMIBC, we are encouraged by the continued derisking of ‘002 – with positive Phase IIa results in lymphatic malformations (LM)… We believe TARA-002 represents a potential $500MM+ opportunity that should allow clinicians to treat comprehensively, and improve patient outcomes,” Ku opined.
That $500 million-plus opportunity, according to the analyst, supports a Buy rating on TARA and a $30 price target, implying shares could skyrocket by 840% in the year ahead. (To watch Ku’s track record, click here)
Turning now to the rest of the Street, other analysts echo Ku’s sentiment. 5 Buys and no Holds or Sells add up to a Strong Buy consensus rating. With an average price target of $24.20, the upside potential comes in at ~659%. (See TARA stock forecast)
Alpha Teknova (TKNO)
Next up is a company that operates in the support segment of the life sciences industry. Alpha Teknova provides research-use and clinical-grade custom reagents, buffers, cell-culture media, and related products for bioprocessing, diagnostics, and molecular biology. Customization (including GMP/Clinical Solutions) is a key part of its offering, which helps its customers in biotech, diagnostics, and academic research.
Teknova’s product lines have found application in a wide range of established and emerging fields, including such hot-button fields as cell and gene therapy, mRNA therapeutics, synthetic biology, and genomics. The company has proprietary manufacturing processes designed to deliver high-quality, made-to-order bioscience products at scale and on short turnaround times. Teknova boasts that it can fill orders at all scales and at all stages of development, from research to commercialization.
The company understands that its customers are pursuing unique work projects, and need unique reagents for efficient, reliable, and repeatable results. Teknova’s modular manufacturing facilities and processes provide the high quality that today’s labs need most. The company provides solutions for a wide variety of laboratory applications, from cell culturing to cryopreservation to extraction and purification to analysis.
On the financial side, in 2Q25, Teknova reported total revenue of about $10.3 million, up ~7% year-over-year from ~$9.6 million in Q2 2024. Its net loss per share was $0.07, which was better than many analyst estimates (around -$0.10). Margin improvements (gross margin ~38.7% vs ~29.2 in the prior year) and growth in its Clinical Solutions segment (up ~32%) contributed. The company reaffirmed its full-year revenue guidance at $39-42 million.
Teknova shares have caught the attention of Craig-Hallum analyst Matthew Hewitt, who lays out the quality of the company’s work and its potential to continue generating gains.
“We believe Alpha Teknova is well positioned to benefit from rapid growth within the bioprocessing market including development of C> and mAbs as well as continued growth in the molecular Dx and genomics markets. By working with customers to develop custom reagents and doing so in weeks rather than months, the company is rapidly becoming the go-to provider of key tools in these sectors. With the end markets recovering over the near-term and prospects for 20%+ revenue growth with 30%+ Adj. EBITDA margins longer-term, we believe investors should own this stock,” Hewitt noted.
Hewitt quantifies his bullish stance on TKNO with a Buy rating and a $12 price target that points toward a potential one-year upside of ~159%. (To watch Hewitt’s track record, click here)
All in all, TKNO holds a Strong Buy consensus rating from the analyst consensus, based on 5 analyst reviews that include 4 Buys and 1 Hold. The shares are trading for $4.64 and their $10 average price target suggests the stock will gain ~115% by this time next year. (See TKNO stock forecast)
To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.