Recently though, the stock’s made a huge comeback, rising around 60% since late March. At today’s price of 71p though, it’s still well below its highs, so could it be worth a look?

A focus on new growth markets

Calnex is led by founder Tommy Cook. And recently, he’s done what all good founders do when business conditions get tough – pivot and focus on new opportunities.

Recently, the company’s expanded into a number of new growth markets, notably data centres/artificial intelligence (AI) and defence. And this has had a positive impact on performance.

Indeed, in a trading update in April, the company advised that it generated revenue growth of around 19% in the financial year ended 31 March. It added that gross margins had remained strong, leading to a jump in profitability.

Looking ahead, the company said that the progress made in the last financial year provides “a strong foundation” for continued profitable growth this financial year and next. It noted that this year it will be focusing on product launches and development of customer relationships to underpin future growth.

Diversification across the cloud computing & datacentres and government & defence markets continued to gain traction in FY26 and, against a backdrop of a stable telecoms market, supports confidence in continued growth in FY27 and FY28.

Calnex Solutions CEO Tommy Cook

AI products

Zooming in on some of its products, one worth highlighting is Calnex ‘Sentry’. This is a rack mount synchronisation monitor that enables cloud computing companies to monitor network performance and it has seen substantial sales to a hyperscaler in recent years.

Another is its ‘SNE’. This is a new product that enables hyperscalers to simulate networks and emulate the real-world conditions under which applications and platforms need to perform and right now it is attracting ‘keen interest’ in the market.

Is there an opportunity here?

Is this penny stock worth a look today? I think so. I hold it in my own portfolio and I have no intention of selling it any time soon given the growth potential associated with the data centre market.

Note that according to McKinsey, by 2030, global spending on data centers is set to hit $7trn.

I’ll point out this stock’s high up on the risk spectrum (so it’s not going to be suitable for everyone to consider). Risks include market weakness, loss of key customers, general stock market volatility, and valuation compression (the valuation looks quite high today given that profits have fallen in recent years).

Taking a five-year view though, I see a lot of potential, especially with Cook running the show. Given that he owns a ton of shares in the company (about 20% of the float), it’s in his interests to boost growth and get the share price higher.

Should you invest £5,000 in Calnex Solutions Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Calnex Solutions Plc made the list?

Edward Sheldon has positions in Calnex Solutions

The post £1,000 buys 1,408 shares in this penny stock that’s making a roaring comeback in 2026 due to AI growth appeared first on The Twelfth Magpie.

Here, I’m going to highlight a penny share I currently own in my Stocks and Shares ISA. Year to date, it’s up over 40%, meaning it’s outperformed many more well-known growth stocks such as Rolls-Royce and Nvidia.

Small but mighty

The stock in focus today is Calnex Solutions (LSE: CLX). This is a tiny (market-cap of £57m) Scottish company that specialises in test and measurement solutions for telecoms, cloud computing and data centres, government and defence markets.

It currently trades for 65p. Like most penny shares however, the share price can be very volatile (over the last few years it has been up and down like a yo-yo).

A pickup in performance

As for why the share price is rising at the moment, there are two main reasons, in my view. One is that after a period of operational weakness (due to soft conditions in the telecoms market), business performance is improving.

In an April trading update, the company told investors it had made good progress in the year ended 31 March, delivering double-digit revenue growth and improved profitability, while continuing to invest in its long-term strategy. For the year, revenue was up about 19% to £21.9m (FY25: £18.4m).

Management noted that gross margins had remained strong, which had contributed to an improvement in profitability for the year. It added that at the end of the year, the company had a strong balance sheet with cash of £9.3m on its books.

AI exposure

Another reason is that the company’s expanding into new markets and increasing its total addressable market. Whereas in the past it was mainly focused on telecoms, it’s now generating revenues from the data centre and defence sectors (both of which are high-growth markets).

“Diversification across the cloud computing & data centres and government & defence markets continued to gain traction in FY26 and, against a backdrop of a stable telecoms market, supports confidence in continued growth in FY27 and FY28.”

Calnex CEO Tommy Cook

Zooming in on the data centre market, Calnex recently said that its SNE network emulation product (currently progressing through a successful discovery phase) is attracting keen interest, with anticipated revenue generation in late FY2027. It also said that its Sentry product – which verifies network performance – has seen significant sales to a hyperscaler and that its next generation product offers strong forward potential across the global data centre industry.

An investment opportunity?

Is this penny share worth a closer look today? I think so, especially if it pulls back a little.

In my view, this company has significant long-term growth potential, given its exposure to the 5G, data centre, and defence markets.

Looking beyond the growth potential, I like the fact that founder Tommy Cook is the CEO as founders tend to make strategic business decisions with the long term in mind (note that he owns a lot of shares so it’s in his interest to boost performance).

Now, I need to stress that it’s a high-risk investment. This is a small company and it hasn’t grown in a straight line in recent years.

Taking a three-to-five-year view though, I see a lot of potential.

The post Meet the 65p AI penny share that’s smashing other growth stocks including Rolls-Royce and Nvidia in 2026 appeared first on The Twelfth Magpie.

Now, often with losers like this, I simply accept that I got it wrong and cut my losses (it can be depressing to stare at losing positions in a portfolio). However, in this case, I’m holding on because I’m not ruling out an explosive comeback.

Why has this stock tanked?

Calnex is a technology company that specialises in testing and measurement solutions for the telecoms industry. Using its solutions, customers (such as BT and China Mobile) are able to validate the performance of critical network infrastructure (which is essential when rolling out and upgrading networks).

Now, this company previously had a great track record in terms of growth and profitability. When I invested back in 2021, its financials were absolutely brilliant.

However, in recent years, telecoms operators haven’t been spending a lot of capital on testing services. And this has led to a major slowdown in sales growth – and a huge drop in profitability – for the company.

For example, in FY24, revenue fell to £16.3m from £27.4m the year before. This drop in revenue led to its net profit falling from around £6m to near zero.

This fall in revenue and profits is why the stock has tanked.

Why growth could pick up

The good news is that conditions in the telecoms market have stabilised. As a result, the company’s revenues and profits are rising again.

For FY25, revenue was £18.4m. This financial year (FY26), analysts expect £20.4m.

I’m optimistic that at some stage, growth will accelerate, leading to a share price rally. After all, global telecoms networks are going to need massive upgrades to handle all the exciting technologies that are coming our way in the years ahead (self-driving cars, etc).

It’s worth thinking about how bad network reception is in some parts of the UK today. In more remote parts of country, it’s often non-existent!

Note that in its August AGM statement, Calnex pointed to innovation in the industry around 1.6Tb/s and high-speed application testing as potential growth drivers. 1.6Tb/s is the next generation of speed in high-speed networking and it’s essential to handle the demands of AI.

Opportunities in the defence industry

The story here isn’t just about telecoms though. You see, recently, Calnex has been expanding into other industries and markets including cloud computing, defence, space satellites, and the US Federal market.

I think the defence industry could be a source of growth for the company (especially with NATO countries set to spend more on defence). In its AGM statement, Calnex said that Network and Application Assurance (NAA) platform enhancements are unlocking additional opportunities in defence as complex network environments require high-quality test equipment.

I see potential

Now, there’s no guarantee that growth will pick up, of course. A risk is that companies in Calnex’s markets turn to competitors for testing products and services.

I see a lot of potential though and I’m backing the company – which is founder led – to turn things around. At 59p, I reckon this penny share is worth a closer look.

The post This 59p penny share is down significantly. But I’m not ruling out an explosive comeback appeared first on The Twelfth Magpie.

Here, I’m going to highlight a penny stock that I hold in my portfolio today (it’s the only such stock I currently own). I see a lot of potential in this one and so do City analysts.

A tiny company

The pick I want to highlight is Calnex Solutions (LSE: CLX). It’s a leading provider of telecom network testing products and services.

It currently trades for 63p. At that share price, its market cap is around £55m, so we’re talking about a very small company.

Long-term growth potential

Now, I’ve held this one for a few years now, and it has been a wild ride (as is often the case with penny stocks). At one stage, I was sitting on great profits, yet today I’m in the red.

What went wrong? Calnex’s revenue and profit growth suddenly slowed on the back of a slowdown in telecoms industry spending – this hit the share price badly.

I continue to believe that the stock can deliver strong returns, however. For a start, I expect telecom network testing to pick up at some point. Today, 5G networks are still very primitive in many parts of the world. Here in the UK, I can’t even get 5G reception in many parts of London!

Secondly, the company has recently been moving into new markets such as defence, cloud computing, and satellites. I suspect the defence market may provide some compelling opportunities for the group in the years ahead, given that many European countries are ramping up their defence spending significantly.

It’s worth noting that in a recent AGM Statement the company stated that growing traction in the cloud and defence markets provides the board with confidence that performance this financial year (ending 31 March) will be in line with market expectations (analysts currently expect revenue growth of 11%). It added that because it now operates in a range of end markets, it’s not reliant on a recovery in the telecoms market for growth.

High risk, high reward

Now, I need to stress that this is very much a high-risk stock. Profits have tanked in recent years and there’s no guarantee that they’ll recover (they could fall further).

I think it’s worth at least taking a look as a high-risk, potentially-high-reward play, however. If earnings do pick up, the share price could fly and it has already started to move higher recently.

I’ll point out that founder and CEO Tommy Cook owns 20% of the company’s shares. So, it’s in his interests to kickstart growth and get the share price firing again.

Note that analysts at Canaccord Genuity currently have a 115p price target on the stock. That’s roughly 83% above the current share price.

The post This 63p penny stock could rise 83%, according to City analysts appeared first on The Twelfth Magpie.

Recently, I scanned the market for penny stock opportunities to consider for 2025. Here are three shares that caught my eye.

DP Poland

First up, we have DP Poland (LSE: DPP). It operates the Domino’s Pizza chain in Poland and Croatia. This company’s growing rapidly. This year, revenue’s expected to come in at £53.7m versus £44.6m last year. For 2025, analysts expect revenue of £65.8m. That would represent growth of more than 20%.

If the company can continue to grow like this, its share price should rise. It’s worth noting that the company plans to open hundreds more stores in the years ahead – this should boost growth significantly.

Now, while Domino’s Pizza’s been successful in the US and the UK, there are no guarantees the brand will continue to do well in Poland and Croatia. Just because a product works in one market doesn’t mean it’ll work in another.

The company’s seeing success at present though, having registered year-on-year order growth of 15% for the first nine months of 2024. So I’m optimistic about its potential.

1Spatial

Next we have 1Spatial (LSE: SPA). It’s a tech company that helps government, utility, and transport organisations make sense of their geospatial (location) data.

This company’s grown at a healthy rate in recent years as it landed new customers. Between FY2019 and FY2024, revenues climbed from £17.6m to £32.3m. This had led to impressive gains for investors. Over the last five years, the share price has nearly tripled.

But what caught my eye is the fact that near-term earnings are projected to surge. For the year ending 31 January 2026, analysts expect earnings per share growth of a whopping 63%. That growth’s set to bring the valuation down significantly. At today’s share price, the forward-looking price-to-earnings (P/E) ratio’s only 26, which isn’t particularly high for a software company.

The risk with a business like this is that contract wins slow, which could lead to share price volatility. But the company believes it has a “huge opportunity” ahead, so I think it’s worth a closer look.

Calnex Solutions

Finally, we have Calnex Solutions (LSE: CLX). It provides test and measurement solutions for the global telecommunications and cloud computing markets.

This stock’s been a dog in recent years. I know, because I own a few shares and they’ve tanked. The problem has been challenging conditions in the telecoms market. These have led to a major slowdown in growth.

But I continue to see potential here. Calnex operates in an important, growing market. And the company believes it will return to growth in the second half of the financial year ending 31 March 2025. If it does, the shares could see a major re-rating.

Now, this stock’s high up on the risk spectrum. If conditions in the telecoms market remain challenging and growth doesn’t pick up, the share price could tank again.

Taking a three-to-five-year view however, I’m optimistic about the potential. Getting global telecom networks fit for the digital age is likely to require a lot of testing.

The post 3 high-risk/high-reward penny stocks to consider buying for 2025 appeared first on The Twelfth Magpie.

Even Amazon was a penny stock at one point!

Today, I’ve identified two undervalued micro-cap shares I feel are worth considering. Could they be the next big thing?

Let’s have a look.

BATM Advanced Communications

BATM Advanced Communications (LSE: BVC) is a relatively small business that develops cybersecurity, diagnostics and networking products for healthcare, government and military agencies. It’s a fairly simple business but one I believe has growth potential. 

From military applications to laboratories and agriculture, there’s high demand for its products in today’s digitised world.

The company enjoyed a huge boost during Covid by developing home testing kits in partnership with Israeli diagnostics firm Novamed. But sales soon tapered off rapidly, wiping 85% off the share price since an all-time high of 140p.

It’s now unprofitable but has a good price-to-book (P/B) ratio of 1, lower than the UK telecoms industry average of 1.9. It holds a fairly decent amount of cash and $116m in equity with only $5m of debt, so its balance sheet looks good.

During 2023, revenue increased from $116m to $122m and is expected to grow to $143m by the end of this year. If it does, the company should become profitable within the next six months. I expect that would give the share price a boost.

However, with headquarters in Israel, the company faces operational risks. Conflict in the region could lead to supply and demand issues or limited financing options. That’s something worth keeping an eye on.

Still, I think it’s promising. Should a resolution to the conflict be found, it’s positioned well for growth.

Calnex Solutions

Calnex (LSE: CLX) designs instruments for testing telecom networks and data centres around the world. Some of its customers include Apple, Samsung, Huawei and AT&T.

Earlier this year, it ended a 12-year sales partnership with Spirent which accounted for much of its revenue. The decision came after Spirent accepted a £1.2bn takeover deal from US firm Keysight Technologies, which makes similar products to Calnex. The share price crashed heavily on the news but has recovered 18% since this year’s low.

In June, the company participated in a successful demonstration of a new low-cost 5G mobile capability called xHaul. The technology has several potential use cases in the development of next-generation mobile networks like 6G.

Calnex is only barely profitable, bringing in a meagre £40k worth of earnings the past year. Revenue and income both fell considerably in its latest earnings report. Still, it has no debt and is in a stable financial position. It also has a decent P/B ratio of 1.7, just below the industry average.

With new sales partners picking up its products, the company has decent growth prospects. It’s undervalued by 52% based on future cash flow estimates and earnings are forecast to grow 72% a year.

It might need some time to become the ‘next big thing’ but I like where it’s headed.

The post Penny stocks with promise! Could one of these little UK tech companies be the next big thing?  appeared first on The Twelfth Magpie.

Macroeconomic issues and profit warnings

Calnex is a Scottish technology business. Its core offering is testing and measurement solutions to the telecoms sector. In simple terms, it helps telecoms businesses ensure the quality of their services.

Calnex shares haven’t exactly set the world alight in recent months due to macroeconomic volatility. To compound matters, the business provided a profit warning last month whereby it said profit would be 20%-30% lower than anticipated. The company said weakened demand for its services against the back drop of economic turbulence had hurt it.

I understand forecasts don’t always come to fruition, but missing by that much is never a good look, if you ask me.

Over a 12-month period, Calnex shares are down 61% from 154p at this time last year, to 59p, as I write. Since last month’s announcement, they’ve dropped 50% from 118p to current levels.

A turnaround on the cards?

It’s worth noting that Calnex had a great record of revenue and profit growth for the past few years. I reckon this is a prime example of not reading too much into past performance to gauge what could happen in the future.

Despite the recent doom and gloom, I think Calnex shares could potentially mount a turnaround. To start with, it can count some of the biggest telecom firms as customers. These include BT, AT&T, and Vodafone. Partnerships with large players in the market could help it mount a fightback.

The rollout of the 5G network could provide a vital boost to Calnex shares in the years ahead. Like all new critical infrastructure and tech, thorough testing is required to ensure service levels are up to scratch. The 5G rollout is set to continue for a number of years yet, so there is potential for Calnex to capitalise.

Calnex also said in its beleaguered update that it is hoping to return to revenue and profit growth for 2025. Plus, there’s an added motivation for the business to bounce back as its founder, Tommy Cook – still in charge of the business – owns more than 17m shares. I’m always intrigued when insiders running a business own shares. They’ve got their own hard-earned cash at risk so if that’s not motivation, I’m not sure what is.

High-risk but high-reward stock

There’s lots to like about Calnex despite falling into penny stock category. An established customer base, market trends such as the 5G rollout that could boost the business, as well as insiders owning shares are all positives. Furthermore, some well-known institutional investors are on board, such as JP Morgan. This could be a sign of faith in the business.

I’d be willing to buy some Calnex shares for my holdings when I next have some spare cash to invest. At just under 60p a share, I wouldn’t be buying loads, but enough to help diversify my portfolio. However, I understand that the short-term outlook is bleak. I’m a long-term investor so I’m prepared for a bit of pain along the way for long-term gains.

The post Could this falling penny stock soar once more due to the 5G revolution? appeared first on The Twelfth Magpie.

Now, sometimes it can be sensible to bail out of underperforming stocks. However, in this case, I’ve done the opposite and bought more.

Profit warning

Calnex is a Scottish technology company that specialises in testing and measurement services for telecoms networks.

Its solutions are designed to help its customers (which include the likes of BT Group, Vodafone, and AT&T) validate the performance of the critical infrastructure associated with digital communication networks.

Until recently, Calnex had a really good track record when it came to growth. Between FY2018 and FY2023, for example, its revenue climbed from £8.4m to £27.4m.

It also had a good track record in terms of profitability. Over that aforementioned five-year period, return on capital employed (ROCE) averaged 27.4%.

However, in recent months, the company has been hit by a downturn in spending across the telecoms industry, with several customers delaying orders due to the weak economic backdrop.

As a result, it advised in October that revenues for the current financial year would be 20-30% below market expectations (a big miss).

Naturally, this profit warning sent the AIM-listed penny stock down sharply.

At one stage, it was trading near 40p – about 80% below its 2023 highs.

Taking a long-term view

After the recent profit warning, near-term broker forecasts don’t look great.

For the current financial year (ending 31 March 2024), revenue is expected to come in at £16.9m, down 38% year on year. Meanwhile, brokers expect zero earnings per share.

So, the short-term outlook is a bit of a write-off.

However, I’m a long-term investor, and taking a long-term view, I remain optimistic in relation to the company’s growth prospects.

The way I see it, demand for telecoms network testing services should be quite high over the next decade due to the rollout of 5G network technology.

This technology is complex in nature and requires comprehensive testing to ensure optimal performance.

It’s worth noting that according to Future Market Insights, the global communication test and measurement market is projected to grow by around 8% per year between now and 2033.

And Calnex has said that it’s confident of returning to growth in FY2025 and beyond.

Another reason I’m optimistic is that Calnex is led by founder Tommy Cook.

And he owns about 17.4m shares in the company (around 20% of the business).

So, it’s fair to say that it’s in his interests to turn things around and get the share price higher.

Other major investors include JP Morgan, Liontrust, and Sanford DeLand Asset Management, so there are some big-name investors onboard here (unlike a lot of other penny stocks).

Ultimately, I think this is a good company – with attractive long-term growth prospects – that is going through a challenging period right now.

That’s why I’ve bought more shares.

I’m backing it for success

This move could backfire on me, of course.

If we see further profit warnings, the shares may go lower.

One risk that concerns me a little is that customer concentration is high. Currently, Calnex’s top 10 customers account for around 50% of revenues. This isn’t ideal.

However, given the long-term industry outlook, I am prepared to take the risk with this stock.

I’m backing it to rebound in the years ahead.

The post Call me crazy, but I just bought more of this 60p penny stock appeared first on The Twelfth Magpie.

However, I do invest a bit of capital in more speculative growth companies in the pursuit of explosive returns. With that in mind, here’s a look at three high-risk, high-reward stocks I’ve bought for my ISA.

An EV play

First up is Volex (LSE: VLX). It’s an under-the-radar UK manufacturing company that specialises in power cords and cables.

There’s no doubt that this stock is a higher-risk investment. Manufacturing is a cyclical industry meaning that it has its ups and downs. And downturns can be quite brutal for companies within the industry (businesses in this space often have high fixed costs).

However, on the rewards front, I see the potential for big gains. This is a company that makes products for a number of growth markets including the electric vehicle (EV) and data centre industries. So revenues and earnings should increase significantly in the years ahead.

And right now, the stock is dirt cheap. Currently, its forward-looking price-to-earnings (P/E) ratio is just 12. That’s the kind of valuation seen on a large-cap business with minimal growth.

So I’m excited about its prospects.

An e-commerce powerhouse

Next we have US-listed stock Shopify (NYSE: SHOP). It operates a subscription-based e-commerce platform that allows merchants to set up their own online stores easily.

This stock is risky for several reasons. One is that its valuation is sky-high. Currently, the forward-looking P/E ratio here is about 73.

Another is that it has historically been very volatile, so this is a stock that can experience wild swings.

Taking a long-term view however, I’m confident this stock will provide me with strong returns.

These days, new retail brands are popping up everywhere and turning to Shopify to power their online stores. I expect this trend to continue in the years ahead, driving revenues higher (analysts expect 24% revenue growth this year).

Ultimately, I see bags of potential in the long run.

A 5G rollout stock

Finally, we have Calnex Solutions (LSE: CLX). It’s a small company specialising in testing and measurement solutions for the telecoms industry.

This stock is risky because it has a market-cap of just £103m. Generally speaking, companies of this size tend to have volatile share prices.

Additionally, the company’s valuation is quite high right now. At present, the forward-looking P/E ratio is about 34.

On the reward side of the equation however, I see huge potential. The telecoms industry is likely to require a lot of testing and measurement services in the years ahead. Right now, networks are simply not equipped to handle a lot of new technologies being rolled out today (eg self-driving cars).

So I think Calnex is well placed for growth. And with a market-cap of just over £100m, and founder Tommy Cook leading the company, I see the potential for significant gains from here.

The post 3 high-risk, high-reward stocks I’ve bought for my ISA appeared first on The Twelfth Magpie.

Ignoring growth stocks can be a mistake however, especially for those with a long-term investment horizon. Because picking the right growth stocks can lead to life-changing returns.

With that in mind, here are three top growth stocks to consider today.

Enormous growth potential

When it comes to growth companies, it’s hard to look past Amazon (NASDAQ: AMZN). Over the last decade, this company has grown its annual revenues from $61bn to $514bn. And investors have made a ton of money as a result.

Looking at Amazon today, I still see a lot of growth potential. This is a company that now operates in a wide range of exciting industries, including online shopping, cloud computing, digital advertising, video streaming, self-driving cars, artificial intelligence (AI), and digital healthcare.

So I expect it to get significantly bigger in the years and decades ahead.

The downside to this stock is that it has a lofty valuation. Currently, the forward-looking P/E ratio using the 2024 earnings forecast is about 45.

This stock has always been expensive though. And a high valuation hasn’t stopped it from delivering huge returns in the past.

The ultimate online shopping stock

Another growth stock with bags of potential to my mind is Shopify (NYSE: SHOP).

It operates a subscription-based e-commerce platform that allows merchants to set up their own online stores easily and start selling goods and services quickly.

In my view, Shopify is the ultimate play on the online shopping growth story.

These days, new brands are popping up everywhere and stealing market share from existing brands. So investing in individual retailers has become quite dangerous.

With Shopify though, investors become a part-owner of the e-commerce platform that so many of these new brands are using to run their businesses.

So no matter which brands win in the long run, Shopify investors should do well.

This is another stock with a high valuation. So I expect it to be volatile. Taking a 10-year view however, I think it will provide strong returns for investors.

A play on 5G

Turning to the UK market, one stock I’m very excited about is Calnex Solutions (LSE: CLX). It provides testing services to the global telecoms industry.

Telecom networks are going to require a huge build out over the next decade to handle new technologies, such as self-driving cars and remote robotic surgery.

Ultimately, 5G is the key ‘enabler’ of a lot of these technologies. And right now, 5G coverage across many countries, including the UK, is very poor (I’m reminded of this every time I take a train trip across the UK and there’s no internet for half the trip).

So I think the backdrop for Calnex looks very supportive.

It’s worth pointing out that while Calnex has generated strong top-line growth in recent years, momentum has slowed recently as a result of the weak macro environment.

And it’s possible that growth could continue to be sluggish in the near term. But over the long term, I expect this founder-led company to produce strong returns for investors.

The post Investing for the next 10 years? Here are 3 top growth stocks with bags of potential appeared first on The Twelfth Magpie.