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3 Stocks Under $10 That Have More Than Doubled in 2023

Motley Fool - Mon Nov 13, 2023

A lot of stocks have more than doubled this year. However, narrow the field to companies with market caps north of $1 billion and stock prices in the single digits and you're left with just seven names.

Rover Group(NASDAQ: ROVR), Nu Holdings(NYSE: NU), and Archer Aviation(NYSE: ACHR) are three names on that thin list. They have strong growth prospects, and since they are still trading in the single digits it means that they started the year well below the $5 price point. Let's take a closer look at these three interesting stocks that have more than doubled in 2023 but are trading for less than $10 a share.

1. Rover

There's no denying that you love your dog or cat like a member of your family. However, you can't take your pet everywhere, and that's where Rover is thriving as the leading platform for finding dog walkers, cat sitters, and providers of pet boarding solutions. The digital marketplace paired up pet owners with service providers 1.8 million times in the third quarter, a 20% increase over the past year.

Rover's business is actually growing even faster. You're paying up more for reliable pet care, explaining why the value of those third-quarter gross bookings has risen 25%. Revenue itself rose 30%, as the networking effect is giving Rover the elasticity to command a thicker slice of the transaction. The bottom line is faring even better, as scalability is resulting in chunkier margins. Rover has now exceed analyst profit targets for four consecutive quarters, posting a profit in all but one of those periods.

A dog resting alongside cash, a pen, and a calculator.

Image source: Getty Images.

Rover scored a record profit of $0.05 a share on an adjusted basis in its latest report. Things should only get better. International travel restrictions have softened. Companies are calling employees back to in-office work. Millennials and zoomers who moved back in with their parents and took in pets during the pandemic are starting to move back out. Who will take care of your furry companions when you're out?

Even something like the recent resumption of student loan repayments -- which will weigh on consumer-facing luxuries -- should actually help Rover on both ends of its ecosystem. With new bills to pay, some of them will be looking for more work. Some pet owners will want care for their dogs and cats while they're working. Others will amp up their presence in the gig economy by joining the ranks of Rover service providers.

Rover boosted its guidance after last week's report, something that it has done all year. A couple of analysts would go on to lift their price targets on a stock that is already up 120% this year.

2. Nu Holdings

The banking industry has been ripe for disruption, but most fintech stock investors have struggled the past couple of years. It's a much better story if you head south to Latin America where Nubank parent Nu Holdings has soared 109% in 2023. Nearly half of adult Brazilians have a Nubank account, and it's just starting to ramp up in Mexico and Colombia.

Revenue rose a foreign exchange-adjusted 60% in its previous quarter. It will offer its third-quarter results this week, shortly after Tuesday's market close. It should be its fifth consecutive quarter of profitability.

The potential upside isn't limited to account growth, which has risen 28% over the past year to 83.7 million across the three Latin American countries. Nu is generating a little more than a third the revenue per account of more established Brazilian banking giants. Now that it has earned the trust and mindshare of the region it's a matter of building out its offerings to become a bigger player across all financial services.

3. Archer Aviation

The biggest gainer this year on this list is taking off in more ways than one. Archer Aviation is a pioneer in the nascent market for electric vertical takeoff and landing (eVOTL) aircraft. The stock has soared 166%.

Unlike Rover and Nu, Archer isn't profitable. It's at least five years away from rounding that corner. Archer is also not generating any kind of meaningful revenue right now. The investor excitement is coming from all of the lucrative and promising partnership deals that it is scoring around the world for its all-electric aircraft in support of next-gen air taxi service. It also just started getting paid by the U.S. Air Force for contracts that could be worth as much as $142 million given the military applications of the light, compact, and quiet vehicles.

Rover, Nu Holdings, and Archer Aviation are on the move. If they keep climbing they won't be trading in the single digits for much longer.

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Rick Munarriz has positions in Nu and Rover Group. The Motley Fool has positions in and recommends Rover Group. The Motley Fool has a disclosure policy.

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