In this article, we will list the 5 Penny Stocks That Aren’t Scams: Best Cheap Stocks to Buy. Please visit 7 Penny Stocks That Aren’t Scams: Best Cheap Stocks to Buy if you would like to see the extended list and the methodology behind it.
5. Petco Health and Wellness Company, Inc. (NASDAQ:WOOF)
Stock Upside Potential: 42.75%
Forward P/E: 11.16
Number of Hedge Fund Holders: 27
Petco Health & Wellness Co. Inc. (NASDAQ:WOOF) is one of the best cheap penny stocks to buy that aren’t scams. On March 16, UBS raised its price target on Petco Health & Wellness Co. Inc. (NASDAQ:WOOF) to $4.00 from $3.50, while keeping a Neutral rating.
The positive stance underscores the research firm’s confidence about the company’s prospects, backed by a multi-faceted growth strategy. Chief Executive Officer, Joel Anderson, has already reiterated that the focus is on driving sustainable, profitable top-line growth. Focus is on pursuing opportunities across core consumables, supplies, and services.
For 2026, Petco Health & Wellness Co management expects sales to remain flat or increase by up to 1.5% year over year with adjusted EBITDA of between $415 million and $430 million. According to UBS, the outlook is realistic, underpinned by the company’s growth strategy. However, as the company captures low-hanging fruit throughout 2025, UBS has warned that the path to efficiency gains would be difficult.
Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) is a comprehensive pet care retailer and services provider that focuses on improving the health and wellness of pets through products, services, and veterinary care. It operates pet care centers, offers online shopping with delivery options, and provides services such as grooming, training, and veterinary care, including vaccinations and surgery.
4. CI&T Inc (NYSE:CINT)
Stock Upside Potential: 47.81%
Forward P/E: 13.57
Number of Hedge Fund Holders: 9
CI&T Inc. (NYSE:CINT) is one of the best cheap penny stocks to buy that aren’t scams. On March 12, Canaccord Genuity reiterated CI&T Inc. (NYSE:CINT) is a Buy and raised the price target to $7 from $6. The price hike is in response to the company delivering impressive fourth quarter 2025 results that affirmed underlying growth.
Revenue in the quarter was up 19.3% year over year to $134 million and marked a fifth consecutive quarter of double-digit organic growth. Adjusted Profit was up 28.8% to $17 million as diluted earnings per share increased 44.6% to $0.11. The solid results come on the heels of the company capitalizing on growing demand for enterprise AI solutions.
According to Cesar Gon, founder and CEO, clients are increasingly moving from AI experimentation to full-scale transformation. The momentum affirms the case for an impressive 2026 with organic growth expected at 14% year over year. The growth rate positions CI&T as one of the fastest-growing firms in the segment.
CI&T Inc. (NYSE:CINT) is a global technology transformation specialist that provides end-to-end digital solutions, combining strategy, design, and software engineering to help large enterprises and fast-growth clients accelerate their digital transformation.
3. N-able Inc. (NYSE:NABL)
Stock Upside Potential: 62.03%
Forward P/E: 11.30
Number of Hedge Fund Holders: 28
N-able, Inc. (NYSE:NABL) is one of the best cheap penny stocks to buy that aren’t scams. On April 2, N-able, Inc. (NYSE:NABL) expanded its Technology Alliance Program with the addition of Zensec and Atomatik.
The addition affirms the company’s commitment to delivering exceptional value through trusted partnerships. In addition, the integration of the two companies’ technologies will enable customers to build resilient, secure, and efficient technology environments.
The alliance is a strategic initiative that seeks to bring together industry-leading technology companies to ensure secure integration across N-able’s business resilience platform. Zensec joins the alliance with structure expert-led incident response services, as Atomatik adds automation capabilities for streamlining repeatable rules-driven security and IT workflows.
Earlier, N-able expanded its AI-driven Security Operations Center (SOC) capabilities through Adlumin Managed Detection. By enhancing its capabilities, the company is helping organizations identify and stop stealthy cyberattacks. The AI-driven approach helps IT teams detect and respond to cyberattacks earlier and uncover subtle, high-risk activity.
N-able Inc. (NYSE:NABL) provides cloud-first software solutions—including remote monitoring and management (RMM), data protection, and AI-powered security—designed for managed service providers (MSPs) to secure and manage IT infrastructure for small and mid-market businesses. They enable IT professionals to monitor, manage, and protect devices and networks from a unified dashboard, focusing on cyber resilience.
2. Playtika Holding Corp. (NASDAQ:PLTK)
Stock Upside Potential: 72.99%
Forward P/E: 5.26
Number of Hedge Fund Holders: 22
Playtika Holding Corp. (NASDAQ:PLTK) is one of the best cheap penny stocks to buy that aren’t scams. On April 6, Playtika Holding Corp. (NASDAQ:PLTK) confirmed the formation of a Special Committee tasked with conducting a review of strategic alternatives.
The committee, made up of independent directors, will evaluate opportunities with the potential of unlocking shareholder value. In addition, it has engaged the services of Morgan Stanley as the financial advisor for the ongoing review.
The review comes when the company is undergoing a strategic transformation on the back of strong operational performance. The Mobile game company delivered solid full-year 2025 results characterized by an 8.1% increase in revenue to $2.75 billion, above the updated guidance. Its profitability metrics also exceeded expectations with Adjusted EBITDA of $753.2 million and a margin of 27.3% above the guided range of between 26.5% and 26.9%.
However, the company plunged to a net loss of $206.4 million from a net income of $162.2 million in 2024. The net loss was down to non-cash charges related to the acquisition of SuperPlay.
Playtika Holding Corp. (NASDAQ:PLTK) is a leading Israeli digital entertainment company that specializes in the development, publication, and operation of free-to-play mobile games. It is known for its portfolio of casual and social casino-themed games, managing popular titles such as Slotomania, Bingo Blitz, and June’s Journey.
1. Burford Capital Limited (NYSE:BUR)
Stock Upside Potential: 113.12%
Forward P/E: 9.68
Number of Hedge Fund Holders: 49
Burford Capital Limited (NYSE:BUR) is one of the best cheap penny stocks to buy that aren’t scams. On March 30, BofA Securities reiterated Burford Capital Limited (NYSE:BUR) as a Buy, trimming the price target to $5.61 from $12.10.
The price target cut is in response to the research firm using a three-year rolling Cash Return on Tangible Equity of 20% to derive the valuation. It also moved the company’s income rating to 9 from 7, reflecting the lack of a cash dividend. BofA also touted Burford Capital’s cash generation ability as healthy.
In the last two years, Burford Capital has produced more than $1.2 billion in cash proceeds and is on course to generate over $5 billion over time. According to Christopher Bogart, Chief Executive Officer, the core business is healthy, growing well, and well-positioned to produce high asset returns. Given the strong cash position and expected cash proceeds, the company is well-positioned for continued growth and debt rationalization despite the YPF setback.
Burford Capital Limited (NYSE:BUR) is the world’s leading provider of legal finance and risk management, offering capital and expertise to law firms and Fortune 500 companies. They fund commercial litigation and arbitration, enabling clients to monetize legal assets, manage legal costs, and reduce risk through non-recourse investment, meaning they only get paid if the client wins.
While we acknowledge the potential of BUR 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 BUR and that has 100x upside potential, check out our report about the cheapest AI stock.
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