Cheap or lower-priced stocks have the potential to deliver exponential gains to shareholders over time. Typically, stocks priced below $5 are referred to as “penny stocks,” which might make investors wary of buying into these companies. However, mega-cap tech giants like Apple (AAPL) and Amazon (AMZN) were once penny stocks, too, and ultimately helped early shareholders build generational wealth over time. 

While there are always risks associated with investing in equities, no matter how low-priced, here's a spotlight on three stocks under $2 that could be poised to deliver money-doubling returns over the long term, according to Wall Street.

Pagaya Technologies

Valued at a market cap of $1.15 billion, Pagaya Technologies (PGY) is a fintech company that develops and implements artificial intelligence (AI)-powered software solutions for enterprises. Its proprietary portfolio of products is used by banks, auto finance providers, real estate service providers, and other lending companies to assist them in the loan origination process.

PGY is currently priced at $1.62, and shares are trading about 95% below their all-time highs. 

The company ended Q2 of 2023 with a network volume of $1.96 billion - which was higher than its earlier guidance, primarily driven by growth in the personal loan segment and new partners in verticals such as auto and point-of-sale. 

Sales grew by 8% year-over-year to $195.6 million in Q2, and Pagaya is on track to end 2023 with revenue of $799 million. While still unprofitable, the loss per share is expected to narrow substantially from $0.69 in 2022 to $0.03 in 2024. 

Pagaya raised $3.1 billion across seven asset-backed securitizations in the first two quarters of 2023, and was recognized as the number one player in this segment in the U.S. in terms of issuance size. 

Out of the six analysts tracking PGY, four recommend “ strong buy,” and two recommend “hold.” Wall Street has an average price target of $3.43, which is 111% above current trading prices. 

Ginkgo Bioworks

Ginkgo Bioworks (DNA) is engaged in the cell programming segment. Its platform is used to program cells that enable the biological production of novel therapeutics, petroleum-derived chemicals, and food ingredients. 

The company leverages its genetic engineering capabilities to produce microorganisms that are used in different industrial applications, and Ginkgo serves multiple end markets, ranging from specialty chemicals, agriculture, consumer products, and pharmaceuticals. Widening demand for foundry services has allowed Gingko to end Q2 with 63 active customers, up from 36 in the year-ago quarter. 

Priced at $1.75 per share, Gingko is valued at a market cap of $3.71 billion. 

Out of the eight analysts covering DNA, three recommend “strong buy,” one recommends “moderate buy,” two recommend “hold,” one recommends “moderate sell,” and one has a “strong sell” recommendation. The average analyst price target is $3.38, indicating upside potential of 93%. 

Canoo

The final stock on my list is Canoo (GOEV), a mobility technology company. It designs, engineers, and manufactures electric vehicles (EVs) that include multi-purpose delivery vehicles and pickups. 

Canoo has famously struggled to generate revenue, let alone profits - but is forecast to end 2024 with revenue of $625 million.

The EV segment is growing rapidly, but is also attracting competition from new and legacy auto manufacturers. Moreover, the auto segment is capital intensive, which suggests Canoo will have to keep raising capital to sustain its cash burn rate before it turns profitable and benefits from economies of scale. As a result, the small automaker has been floated as a potential takeover target, with Apple (AAPL) repeatedly emerging as a rumored suitor.

Canoo ended Q2 with $5 million in cash, and expects to invest between $70 million and $100 million in capital expenditures. In August, it raised $56.2 million via a convertible stock offering, diluting existing shareholder wealth.

Out of the four analysts tracking GOEV, three recommend “strong buy,” and one recommends “hold.” The average price target for Canoo stock is $3.11, which is a 623% premium to the stock's current price.