In the last week, the market has stayed flat, but over the past 12 months, it has risen 19%, with earnings forecasted to grow by 18% annually. For those looking to invest in smaller or newer companies, penny stocks — despite being a somewhat outdated term — can still offer surprising value. With solid financial foundations, these stocks have the potential to outperform while offering greater stability.

We're going to check out a few of the best picks from our screener tool.

CareCloud (CCLD)

Simply Wall St Financial Health Rating: ★★★★★☆

Overview: CareCloud, Inc. is a healthcare information technology company offering technology-enabled business solutions and Software-as-a-Service to healthcare providers and hospitals in the United States, with a market cap of approximately $99.86 million.

Operations: CareCloud's revenue is primarily derived from its Healthcare IT segment, which generated $109.43 million, and its Medical Practice Management segment, contributing $14.71 million.

Market Cap: $99.86M

CareCloud, Inc. has shown financial resilience by achieving profitability and maintaining high-quality earnings, with a strong operating cash flow that covers its debt well. Despite being dropped from several Russell indices recently, the company has streamlined its capital structure by redeeming preferred stock and securing lower-cost institutional financing through a $50 million credit facility. While CareCloud's Return on Equity is considered low at 16.8%, it trades at a good value compared to peers and industry standards. The company's experienced management team and board further bolster confidence in its operational stability amidst evolving market conditions.

Cricut (CRCT)

Simply Wall St Financial Health Rating: ★★★★★★

Overview: Cricut, Inc. designs, markets, and distributes a creativity platform for crafting professional-looking handmade goods across multiple regions worldwide and has a market cap of approximately $925.65 million.

Operations: Cricut generates its revenue through two primary segments: Platform, which accounts for $332.18 million, and Products, contributing $373.44 million.

Market Cap: $925.65M

Cricut, Inc. presents a mixed picture for penny stock investors. The company is debt-free and maintains high-quality earnings with a net profit margin of 10.4%, up from last year. Its short-term assets significantly outweigh liabilities, indicating strong liquidity. However, while recent earnings growth of 9% surpasses its five-year average decline, overall revenue has slightly decreased compared to the previous year at US$159.47 million for Q1 2026. Cricut's new brand positioning and AI Project Designer tool signal strategic innovation aimed at expanding its creative platform's reach but may not immediately translate into significant financial gains amidst fluctuating market conditions.

Amplify Energy (AMPY)

Simply Wall St Financial Health Rating: ★★★★★☆

Overview: Amplify Energy Corp. is involved in acquiring, developing, exploiting, and producing oil and natural gas properties in the United States with a market cap of $162.67 million.

Operations: The company's revenue of $228.78 million is derived from its activities in the exploration, development, and production of oil and natural gas.

Market Cap: $162.67M

Amplify Energy Corp. offers a complex profile for penny stock investors. Recently added to multiple Russell indices, the company shows potential visibility gains in the market. It is debt-free, with short-term assets exceeding short-term liabilities, indicating solid liquidity management despite long-term liabilities not fully covered by current assets. However, its recent financial performance reveals challenges: Q1 2026 revenue dropped significantly to US$37.46 million from US$72.05 million year-over-year, accompanied by a net loss of US$38.12 million and declining profit margins due to large one-off items affecting earnings quality and stability concerns amidst volatile oil production results.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.