In this article, we will look at the 10 Best Rising Penny Stocks to Buy According to Analysts.

Small-Cap Performance in Q1 2025

The start of 2025 was characterized by a series of challenges for the US equities across the board. Tariffs, inflationary concerns, the risk of recession, and loss of consumer confidence, all led to the small-cap Russell 2000 Index falling 9.5% and the large-cap Russell 1000 Index falling 4.5%. On April 1, Royce Investment released its fiscal first quarter outlook for small-cap stocks. Francis Gannon, who is the Co-Chief Investment Officer, and Managing Director, noted that while the large-cap outperformed the small-caps, however, this performance was not concentrated among the Magnificent Seven, which has dominated the market previously. This is evident from the fact that the Russell Top 50 Index fell 7.6%, whereas the NASDAQ Composite was down more than 10.3%.

Gannon highlighted that while the small-cap stocks underperformed the large caps, however, the divergence from the Mag Seven is a positive trend for the small-cap stocks. He noted that historically speaking the broadening of the market away from the top few stocks has meant good things for the small caps in the long term.

Moreover, while dissecting the performance of small-cap equities during the downturn, Gannon noted that the Russell 2000 Value Index held better as compared to the Russell 2000 Growth Index. The small-cap value stocks have outperformed the growth counterparts over 1 and 5-year comparisons. However, when looked up from a 10-year standpoint the performance for both categories remains the same. Gannon further pointed out that during the first quarter of 2025, the biggest detractors of the Index were Information Technology, Industrials, Health Care, and Consumer Discretionary, while Utilities was the only positive contributor.

Lasty, Gannon shared his experience of being a small-cap investment strategist for over 50 years. He highlighted it is still too early to tell if the first quarter drop for small-cap stocks was only short-term or indicates a long-term period of falling, however, he noted that corrections are common for the small-cap investors. Gannon advised investors to learn to be greedy when others are fearful and vice versa if they are interested in small caps. Moreover, looking at the stocks from a valuation standpoint, small caps remain largely undervalued as compared to large caps and Gannon advised the key to tackling periods of uncertainty is to remain invested.

With that let’s take a look at the 10 best rising penny stocks to buy according to analysts.

Our Methodology 

To compile the list of the 10 best-rising penny stocks to buy according to analysts, we used the Finviz stock screener and CNN. Using the screener, we aggregated the list of penny stocks (trading between $1 and $5) with more than 30% share price appreciation over the past month, and more than 30% average upside potential. Lastly, we sorted the list by market capitalization and ranked the stocks in ascending order of the number of hedge funds sourced from Insider Monkey’s Q4 2024 database. Please note that the data was collected on April 17, 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10 Best Rising Penny Stocks to Buy According to Analysts

10. TMC the metals company Inc. (NASDAQ:TMC)

Price: $2.87

1-Month Performance: 58.56%

Analyst Upside Potential: 46.34% 

Number of Hedge Fund Holders: 5

TMC the metals company Inc. (NASDAQ:TMC) is a deep-sea mineral exploration company that focuses on collecting and processing polymetallic nodules, which are rock-like deposits in nickel, copper, cobalt, and manganese. The company then processes these nodules to extract metals that are used for high-growth industries including electric vehicle batteries and renewable storage.

On March 31, Alliance Global Partners raised the firm’s price target on the company from $3.75 to $4.50, while keeping a Buy rating on the stock. The upgrade was based on the company’s 2024 results and a significant change in permitting strategy. TMC the metals company Inc. (NASDAQ:TMC) is shifting to a permitting path under the U.S. Deep Seabed Hard Mineral Resources Act (DSHMRA). Previously, the company was relying on ISA’s yet-to-be-adopted mining code, which led to delays. Although the company reported a net loss of $81.9 million for the year and liquidity of about $43 million. However, analysts expect TMC, the metals company Inc. (NASDAQ:TMC) to rise making it one of the best-rising penny stocks to buy according to analysts.

9. Theratechnologies Inc. (NASDAQ:THTX)

Price: $2.66

1-Month Performance: 65.22%

Analyst Upside Potential: 46.62%

Number of Hedge Fund Holders: 4

Theratechnologies Inc. (NASDAQ:THTX) is a pharmaceutical company based in Canada. It focuses on developing commercialized treatments for HIV, Oncology, and Nonalcoholic Steatohepatitis. The company currently markets two main prescription products for HIV in the United States including the EGRIFTA SV and Trogarzo.

On April 11, Theratechnologies Inc. (NASDAQ:THTX) was upgraded to Buy from a Hold by The JonesResearch, with a price target of $3. Future Pak has made an offer to acquire the company, which the boards of directors are reviewing. Management has formed a special committee to evaluate the potential sale, however, analysts believe that it is unlikely that this offer would convert into a transaction.

On the other hand, Theratechnologies Inc. (NASDAQ:THTX) has been doing well financially. It grew its revenue by 17% year-over-year to reach $19 million during the first quarter of 2025. The growth was driven by EGRIFTA SV sales which improved 44.8% during the same time. The stock has improved more than 65% over the past month, making it one of the best-rising penny stocks to buy according to analysts.