That’s why validating a company is on rock-solid standing before rolling the dice on a risky play is more important than ever today. There’s less room for error, and though many of the worst companies didn’t make it through the rate hike regime, a handful of meme stock stinkers and value traps still offer deceptively attractive prospects despite their inherently shaky standing.
These three rock-solid stocks buck the trend, though. They’re definitely on the speculative side of the risk/reward spectrum and, in some cases, even pre-revenue. Despite the challenges, they have a rock-solid operational foundation and enough bullish tailwinds to send them soaring 100% or more by 2025.
The Metals Company (TMC)
Deep-sea mining firm The Metals Company (NASDAQ:TMC) is literally and metaphorically a rock-solid stock in a unique bid to march toward global sustainability goals while ensuring maximal resource availability. The company is currently exploring metals and minerals within specific sub-surface sea zones. One such area has enough rare resources to “potentially supply battery metals for 140 million electric vehicles.“ Likewise, the company’s global sea stakes may contain as much to meet “requirements for 280 million EVs, roughly the size of the entire U.S. passenger vehicle fleet on the road today.”
Like any exploratory mining operation, The Metals Company has high hopes but equally high capital requirements, making balancing cash burn tricky. The company’s fourth-quarter report indicated a $15.2 million quarterly cash burn with enough cash and liquid assets (including credit accounts) to meet working capital and cost requirements for the next year. That’s a tight balancing act. Still, on the heels of legislative boosts to The Metals Company’s prospects and third-party finance and funding expertise jumping aboard, enough public and private sector interest could keep preliminary mining efforts afloat in hopes of massive returns once metals nodule collection, cleaning and processing are practical propositions.
Chegg (CHGG)
As startups and mature firms alike increasingly create GPT-wrapped “innovation,” Chegg (NYSE:CHGG) stands out as a rock-solid EdTech contender leveraging artificial intelligence to change the face of legacy learning institutions and concepts. Though shares trade nearly one-third lower than their January pricing, the company’s fourth-quarter report was sufficiently solid to lead a new round of analyst upgrades in anticipation of April 29th’s first-quarter report.
The company’s gross margin already sits at a solid 68%, with management forecasting 2024’s stats to spike even higher despite 2023’s revenue and subscription rates dipping slightly. This comes amid substantial R&D and related costs as the company tries to build new AI offerings and adapt them to changing trends and tech. Company CEO Dan Rosenweig affirmed the tricky balancing act, saying that the team “completely reinvented the company by leveraging the advancements in artificial intelligence” and that (as initial AI hype falters) “leaders in their verticals like Chegg are taking control of their own destiny by building their own models which [allow] for higher quality and lower cost.” Chegg seems to be finding its footing within AI-enabled EdTech. As more individuals and institutions embrace the future, this rock-solid stock could surge by a huge margin in 2024.
AST SpaceMobile (ASTS)
AST SpaceMobile (NASDAQ:ASTS) started 2024 with a whimper as much-hyped strategic funding that included backing by AT&T (NYSE:T) and Google (NASDAQ:GOOG, NASDAQ:GOOGL) materialized but was bookended by dilutive equity and convertible note offerings. Still, getting satellites into low-earth to enable global cell connectivity isn’t cheap, and recent developments point to imminent commercial rollouts €” if you read between the lines.
This week, AT&T dropped an ad featuring Ben Stiller that touted the company’s imminent satellite/cell solution availability. The satellites in question refer directly to AST SpaceMobile’s partnership with the telecom giant, as confirmed by AST’s official X account. Ben Stiller doesn’t come cheaply €” this ad, shown during the PGA Masters Tournament, is likely just as costly as a Superbowl ad. Why hype commercial satellite cell service at such a steep cost if the tech isn’t expected to be space-bound until the end of the year? While it may be a bit too “Pepe Silvia” for a definitive say, it seems that AT&T’s rock-solid endorsement of imminent satellite service implies a rapid upside on the horizon.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.