5 Best Penny Stocks Under $1 According to Hedge Funds

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1. Definitive Healthcare Corp. (NASDAQ:DH)

Number of Hedge Fund Holders: 20 

Stock Price as of Last Close of May 12: $0.92 

Definitive Healthcare Corp. (NASDAQ:DH) is among the best penny stocks on this list.

TheFly reported on May 8 that Baird reduced its price target on DH to $1.10 from $1.30 in a revised outlook, while a Neutral rating was maintained. The adjustment came after the firm refreshed its financial model in response to the company’s first-quarter performance.

On May 7, Definitive Healthcare Corp. (NASDAQ:DH) released its first-quarter 2026 results for the period ended March 31, 2026, reporting revenue of $55.9 million, down 6% from $59.2 million a year earlier. The company recorded a net loss of $192.4 million, which included significant goodwill impairment charges, compared with a $155.1 million loss in the prior-year quarter.

The company’s Adjusted profitability showed improvement, with adjusted net income of $8.5 million versus $7.0 million, and adjusted EBITDA rising to $15.3 million, or 27% of revenue, compared with $14.7 million and 25% previously. Cash flow from operations reached $11.6 million, while unlevered free cash flow totaled $18.0 million. Looking ahead, the business issued second-quarter and full-year 2026 guidance, projecting stable revenue trends alongside continued adjusted profitability and EBITDA margin expansion supported by operating efficiency and disciplined cost management.

Definitive Healthcare Corp. (NASDAQ:DH) is a SaaS healthcare data company based in Framingham. It provides analytics on healthcare providers and claims to help clients improve sales, marketing, and market research.

While we acknowledge the potential of DH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DH and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

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