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We recently published a list of 12 Popular Penny Stocks on Robinhood to Watch. In this article, we are going to take a look at where Interactive Strength Inc. (NASDAQ:TRNR) stands against other popular penny stocks on Robinhood to watch.
The stock market is navigating a complex landscape influenced by geopolitical tensions, trade policies, and shifting investor sentiments. Recent developments, such as the U.S. administration’s decision to impose tariffs on Canada and Mexico, have introduced volatility, with the broader market experiencing a 5.2% decline over the past month.
Impact of Tariffs on the U.S. Economy
The Trump administration’s implementation of tariffs on imports from Canada and Mexico has raised concerns about potential economic repercussions. The Organization for Economic Cooperation and Development (OECD) forecasts that these tariffs could reduce U.S. GDP growth to 2.2% in 2025 and 1.6% in 2026. Additionally, Canada and Mexico are expected to experience economic slowdowns, with Canada’s growth slowing to 0.7% and Mexico’s economy contracting by 1.3% in 2025.
The announcement and implementation of these have contributed to market volatility. The Dow Jones Transportation Average, which includes companies like FedEx and Delta Air Lines, has declined over 17% from its November peak, reflecting investor concerns about the economic impact of trade policies. However, despite these challenges, there are emerging opportunities, particularly in the realm of penny stocks.
Return Potential of Penny Stocks
Penny stocks provide an accessible entry point for investors with limited capital. Their affordability allows individuals to diversify their portfolios without significant financial commitment. This characteristic is particularly appealing to novice investors seeking to enter the market.
While large-cap stocks offer stability and generally lower volatility, penny stocks present an opportunity for considerably higher percentage gains due to their smaller size and the potential for rapid expansion into niche markets or through innovative products and services. Academic research also indicates that the higher risk associated with the smaller market capitalization and lower liquidity of penny stocks is often compensated by higher expected returns through size and liquidity premiums. For instance, a study titled “On the Trading Profitability of Penny Stocks” examines the characteristics and pricing behavior of penny stocks, highlighting that these stocks are characterized by low liquidity and small market capitalization. The research suggests that these factors contribute to higher expected returns, aligning with the size and liquidity premiums observed in broader markets. The trade-off between risk and potential reward is a key factor that attracts growth-oriented investors to this segment.
Our Methodology
For this article, we performed an extensive analysis of leading financial websites to identify 12 penny stocks available on Robinhood. Our selection process was based on a consensus approach, where we considered only those stocks that consistently appeared across multiple sources during our research. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q4 2024. The stocks are ranked according to hedge funds having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Interactive Strength Inc. (TRNR) the Popular Penny Stock on Robinhood to Watch?
An athletic person entering a retail store, giving a glimpse of the fitness lifestyle.
Interactive Strength Inc. (NASDAQ:TRNR) is a digital fitness platform that combines innovative connected fitness hardware with expert health coaching and on-demand classes.
Interactive Strength Inc. (NASDAQ:TRNR) has announced plans to acquire a $15 million+ revenue-generating connected fitness equipment company. This all-stock transaction, expected to close by the end of March 2025, follows months of due diligence and discussion. It marks TRNR’s second transaction of the year, underscoring its aggressive growth strategy in the global health and wellness market. It is among the best penny stocks on Robinhood.
Interactive Strength Inc. (NASDAQ:TRNR) reported a net loss of $7.1 million for Q3 2024, which translates to a loss of $1.53 per diluted share. This is an improvement from the corresponding quarter in 2023, which registered a net loss of $10.4 million or a loss of $29.35 per diluted share. The company’s revenue met the guidance at $2.0 million, marking a significant 325% growth compared to Q2 2024. Adjusted EBITDA for Q3 2024 was a loss of $2.3 million, a $1.0 million improvement compared to Q3 2023. Looking ahead, TRNR expects to generate $2.4 million in revenue in Q4 2024.
Overall, TRNR ranks 11th on our list of popular penny stocks on Robinhood to watch.While we acknowledge the potential for TRNR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TRNR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
