Contrary to what investors have seen this earnings season, earnings growth is traditionally one of the key indicators of stock price growth. For calendar year 2026, FactSet forecasts earnings growth of companies in the S&P 500 to come in at 15%. That's above the trailing 10-year average of 8.6%. If accurate, that would mark the third consecutive year of double-digit growth.
While earnings forecasts look bullish across the board for 2026, some companies are expected to grow earnings by more than the S&P 500 average. The MarketBeat stock screener is a free tool that can help you screen for factors like expected earnings growth in the next 12 months.
That tool helped identify three stocks expected to grow earnings by at least 74%. Better still, each of these stocks trades near $5, meaning they could be classified as penny stocks. These stocks often have significant volatility, but investors with an appropriate risk tolerance and the time to let the growth stories play out could find buying at these levels to be a profitable opportunity.
Offshore Drilling Recovery Fuels 100% Earnings Growth Outlook
Oil stocks have lagged the energy sector for much of the last five years. The issues have alternated between supply and demand. But in 2026, conditions look favorable for rising oil prices as demand may begin to test supply.
That's the argument for Transocean Ltd. (NYSE: RIG). The company provides offshore contract drilling services for the oil and gas industry. Transocean’s fleet is particularly suited for the complex drilling requirements of deepwater drilling.
RIG stock is up over 28% in the last 12 months, with a good bit of that growth coming in the last three months. The stock is trading above its consensus price target of $4.55. However, on Feb. 2, BTIG Research increased its price target on the stock to $6 from $5.
More importantly, analysts forecast 100% earnings growth. This comes after the company turned in its first profitable quarter in the last five quarters in November. Transocean will report earnings on Feb. 19, which may confirm the optimistic outlook.
Gold Miner Positioned for a Catch-Up Trade as Earnings Rise
B2Gold Corp. (NYSEAMERICAN: BTG) can be considered the laggard in this group. Analysts expect the company to grow earnings by “only” 74%. B2Gold is a junior miner that is based in British Columbia but has mining operations throughout the world.
BTG stock is up 86% in the last 12 months, but the consideration for investors is that mining stocks have lagged the price of gold. That’s expected to change in 2026. First, the recent pullback in gold is not likely to change the catalysts that have been moving precious metals higher. That means there’s time for a catch-up trade with miners like BTG stock.
Short interest in BTG stock is not a significant percentage of the overall float but has climbed sharply in the 30 days ending Feb. 5 as investors bought into the sell-off in gold prices.
But short sellers can overplay their hands. B2Gold reports earnings on Feb. 18. That event may confirm the earnings outlook and begin moving the stock higher.
Biotech Penny Stock With 150% Earnings Growth Potential
It’s hard to do a list of penny stocks with upside earnings potential without dipping into the biotechnology space. In this case, investors may want to consider Ironwood Pharmaceuticals Inc. (NASDAQ: IRWD). The company is a commercial-stage biotech company that focuses on medicines for gastrointestinal (GI) disorders.
At first glance, IRWD stock would seem like a poor choice since it trades 20% above its consensus target. But that price target does not likely account for the company’s updated revenue guidance from January.
The company increased its topline guidance by 40%, which has led to a few significant price target increases.
Although Ironwood still has to execute, as a key drug is in a Phase 3 trial this year. Analysts forecast 150% earnings growth in the next 12 months, which likely means the stock price is far too low.
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The article "3 Stocks Trading Near $5 With Massive Earnings Upside" first appeared on MarketBeat.
