The Best ASX Penny Shares and Small-Cap Stocks to Buy

Everyone loves a bargain, and whilst you can pick out penny shares in the stock market, it is not easy to choose the right names. Bargain stocks often emerge in troubled times when the market takes a dip, however, there are penny stocks available at any time. For investors looking for lower entry level shares, we have picked some of the best ASX penny stocks and small cap stocks to buy.

Last year, we looked at four penny stocks and four small cap stocks to consider as ‘best buys” at that time and it leaned heavily toward exploration and development stories. This time around we keep some of those names, but give more weight to real revenue, improving fundamentals, and visible operating milestones. We have also expanded the list to include 13 of the best penny stocks and small caps on the ASX to make our shortlist more of a portfolio to track, and give you a bit more choice.

The Best ASX Penny Stocks

Here are the top penny stocks on the market you might want to consider if you are bargain hunting.

Otto Energy (OEL)

Otto Energy shares remain one of the more interesting true penny stocks because it is not a pure concept stock. Whilst Otto may be a penny stock, the company has two producing gas assets in the US state of Louisiana along with two oil and gas assets, also in Louisiana. Otto maintains an office in Houston Texas.

What makes Otto different from many penny stocks is that the latest figures show real revenue and positive profitability metrics despite the tiny market value.

The catch is that this is still a microcap energy stock trading at half a cent, so liquidity and project concentration risk are very high. It still belongs on the list, but only as a speculative energy name rather than a core bargain stock.

• Market cap: A$24.0m
• Revenue TTM: A$14.1m
• EBITDA: A$5.66m
• Quarterly revenue growth YoY: -17.6%

Prescient Therapeutics (ASX: PTX)

A biotechnology company working on cancer treatments, Prescient Therapeutics, made a case for penny stocks when its lead candidate, PTX100, received orphan drug approval from the US Food and Drug Administration in March of 2023. That sent the stock price on an upward trajectory as investors decided in large numbers that this penny stock was worth buying, but the trend reversed.

In December of 2023, the announcement of positive results from clinical trials of PTX100 ignited another rally. Neither rally lasted, yet PTX shares trade 12% higher on a rolling 1 year.

Prescient still deserves a place on our list, as the thesis remains in tact. It remains a clinical-stage oncology company with PTX-100 as its lead asset, and it still offers a live catalyst path if the clinical story advances. This is a classic biotech penny stock: attractive upside if the science works, but no shortage of dilution and development risk.

• Market cap: A$58.9m
• Revenue TTM: A$4.27m
• EBITDA: -A$7.54m
• Quarterly revenue growth YoY: -7.3%

You might consider if: You are a biotech enthusiast, happy to be driven by a catalyst.

LaserBond (ASX: LBL)

LaserBond shares are a new addition to last year’s list, and come in off the back of a 40% gain on the past year, boosting market cap. LaserBond is a better penny share candidate than many junior explorers because it is an operating industrial technology business, not a hope-and-drill story. It has earnings, cash generation, industrial exposure, and a clearer commercial moat than most shares that change hands for under A$1.

• Market cap: A$64.4m
• P/E: 13.6x
• Dividend yield: 2.88%
• Revenue TTM: A$46.2m
• Quarterly revenue growth YoY: 13.4%

You might consider if: You are someone who wants a genuine penny stock with actual profits and less story-risk.

Praemium (ASX: PPS)

Praemium shares are another that deserves a place among the top ASX penny shares. It is not as tiny or as speculative as most in the category, but at A$0.70 it still fits the Australian penny-stock price definition. More importantly, it looks much stronger fundamentally than many others in the category. The business already has scale, recurring platform-style economics, and positive earnings power.

The company provides platform and wealth-management technology for advisers and investors. It is profitable, pays a dividend, and has a cleaner valuation setup than many of the speculative resources names in the broader screen.

At the latest price of A$0.70, PPS has a market cap of A$341 million, a P/E of 17.5, a forward P/E of 8.2, and a dividend yield of 3.6%. That makes it one of the more balanced penny-share candidates.

The growth story is based on funds under administration. Praemium’s Q2 FY26 update showed total FUA up 14% year on year to A$70.5 billion, with platform FUA up 8% year on year to A$32.5 billion.

That gives PPS a clearer business model than many sub-A$1 shares. You are not waiting for a mine to be financed or a drug trial to work. You are buying a profitable wealth-platform business with operating leverage if FUA keeps growing.

The risk is that platform businesses are competitive, and flows can be sensitive to adviser behaviour, market performance and pricing pressure.

The Best ASX Small-cap Stocks

Commonwealth Bank sets a standard for categorising stocks as “small-cap”, that is a market cap as low as a few hundred million dollars but less than two billion dollars. Small-cap stocks have more room for growth than their large-cap counterparts. Peter Lynch achieved legendary status as one of history’s greatest investors due to his management of the Fidelity Magellan Fund. One of his many valuable observations on market activity was his belief that “big companies don’t make big moves.”

Macmahon Holdings (ASX: MAH): Best Operational Story

Macmahon Holdings is a mining services contractor providing surface mining, underground mining, civil infrastructure and related services across Australia and Southeast Asia. Is is also one of the strongest businesses on our list.

It is a penny share by price, but not by scale. With a market cap of A$2.0 billion, revenue TTM of A$2.56 billion, EBITDA of A$300.2 million, and a dividend yield of 2.0%, Macmahon is far more substantial than the typical sub-A$1 stock.

The catch is that Macmahon shares have already moved hard. MAH shares have risen from about A$0.28 to A$0.93 over the past year, a gain of roughly 232%. That means you are not exactly early to the party with this one. Despite the rally, the forward valuation still looks reasonable at 11.5 times expected earnings.

The company’s recent results support the growth story. Macmahon’s FY26 half-year update showed revenue of A$1.3 billion, up 11%, and its investor hub highlights a large order book and strong tender pipeline.

Tyro Payments (TYR): Best Risk/Reward Turnaround

Tyro Payments shares (ASX:TYR) now looks like one of the cleanest names in the ASX penny stock universe.

It might not be the highest-growth stock here, and it is not the cheapest on a basic P/E screen, but it has something many penny shares do not. That means real revenue, real earnings, positive EBITDA and improving profitability.

Tyro generated revenue TTM of A$489 million, EBITDA of  A$56.6 million, and trades on a P/E of 16.1. That is not demanding if the company can keep improving margins. Whilst the share price has pulled back over the past year, there is a potential turnaround story playing out that could reward holders.

The latest operating story is encouraging, with Tyro’s H1 FY26 update showing EBITDA up 19.8% to A$39.5 million, statutory profit before tax up 72.3% to A$17.7 million, and free cash flow up 51.8% to A$13.6 million. The company also confirmed that it was on track to deliver against FY26 financial guidance.

The risk is competition. Payments is a tough market, and Tyro has to compete against banks, global processors and software-led payment providers. But as a sub-A$1 stock with improving earnings and an average price target well above the current price, it deserves consideration.

Lindian Resources (LIN): Best Momentum Story

Lindian Resources is a rare earths developer focused on the Kangankunde Rare Earths Project in Malawi.

This is the highest-momentum name in the group, with LIN shares having risen from A$0.13 to A$0.83 over the past year, a gain of 538%, and they were up around 27.7% over the latest five-days ahead of our post.

The investment case is all about rare earths supply, which has been in a sector in favour. Lindian describes Kangankunde as a globally significant rare earths project, with a 261Mt resource at 2.14% TREO, fully permitted status, construction advancing, and first production targeted for Q4 2026.

That is a powerful story because rare earths remain strategically important for magnets, electrification, defence, clean energy and supply-chain diversification away from China.

But Lindian is not a cheap stock on current fundamentals. It is still pre-profit, and has no meaningful revenue, which means you are paying for future production rather than current earnings.

Lindian may still appeal if you want rare earths exposure with strong market momentum, but it is the most sentiment-driven name on this list.

Nine Entertainment (NEC): Best Value and Income Turnaround

Nine Entertainment owns a portfolio across television, streaming, publishing, radio and digital media, including 9Network, 9Now, Stan, major mastheads and other media assets.

Nine is not a high-growth tech story by any stretch, but a value and income turnaround potential. The NEC share price has fallen from A$1.59 to A$0.94 over the past year, a decline of 41% before dividends. That pullback actually is what qualifies NEC as a penny share today.

The valuation looks interesting. Nine trades on a P/E of 13.4, has an enterprise value to EBITDA multiple below 5, and offers a dividend yield of 9.1%. That is a very different setup from the speculative resource names that dominate the sub-A$1 universe, yet there are reasons for it.

The business is not broken, but it is cyclical. Nine’s H1 FY26 result showed revenue of A$1.14 billion, Group EBITDA of A$201 million, up 6%, and net profit after tax of A$95.2 million, up 30%.

The risk is that media earnings are tied to advertising markets, sport rights costs, streaming competition and structural pressure on traditional television and publishing. Nine is cheap for a reason.

But from a valuation standpoint, NEC stands out. You are buying a profitable media group at a low multiple, with a large yield and recovery potential if advertising conditions improve.

Alpha HPA (A4N): Best Advanced Materials Option

Alpha HPA is an advanced materials company developing high-purity aluminium products used in semiconductors, lithium-ion batteries, synthetic sapphire, power semiconductors, micro-LEDs and other high-tech applications.

This is not a value stock in the traditional sense, being loss-making, and with very little current revenue. The reason it makes the list is growth potential, as Alpha HPA is trying to move from development into commercial-scale advanced materials production, which could place it in a valuable niche tied to batteries, semiconductors and AI-related infrastructure.

The share price has fallen from A$0.92 to A$0.69 over the past year, a decline of roughly 25%, but it was up about 14.1% over the latest five-days. The average price target of A$1.17 also sits meaningfully above the latest price.

The strategic story is helped by government backing. In January this year, Australia’s National Reconstruction Fund Corporation announced a A$75 million investment to support Alpha HPA’s HPA First Project in Gladstone, describing the project as operating on 100% renewable energy with near-zero waste and a differentiated purity profile.

The risk is execution. Alpha HPA needs to build, scale, sell and commercialise successfully. Until revenue ramps, valuation metrics such as price-to-sales are not very useful.

Patriot Battery Minerals (ASX: PMT)

Canada-based Patriot Battery Minerals is an exploration stage company targeting properties containing minerals needed for battery use and precious and base metals. Patriot’s wholly owned Corvette Project in Quebec contains significant lithium potential. The Corvette Project has a new name, generating a string of positive announcements; Shaakichiwaanaan Project Patriot is also the sole owner of a gold asset in the US and a 40% owner of two additional lithium assets.

The company’s exposure to lithium assets in North America is attracting investor interest, with a share price boost at the close of 2024 as the company announced Volkswagen had taken a 9.9% interest in the company and the signing of a 10 year offtake agreement.

PMT shares remain one of the more credible lithium development stories on the ASX, helped by strategic backing and visible project momentum. It is still speculative because it is not yet a revenue stock, but among lithium developers it remains one of the better-connected names.

• Market cap: A$798.8m
• Revenue TTM: A$0
• EBITDA: -A$16.3m

You might consider if: You are someone who wants exposure to lithium development, with a strategic-partner angle.

Frontier Energy Limited (ASX: FHE)

Frontier focuses on a renewable fuel source for large vehicles, from trucks to aeroplanes. The source is hydrogen produced using renewable solar energy, earning the moniker of green hydrogen.

Hydrogen fuel is colour-coded by the source used to create it. Brown or black hydrogen is made from coal. Blue hydrogen uses natural gas.

Frontier’s project is at Bristol Springs in Western Australia. A 2022 pre-feasibility study showed potential hydrogen production of 4.4 million tonnes per year at the cost of just $2.83 per kilogram.

Frontier still makes sense as a speculative renewable-energy small cap, but remains a development-stage story rather than a proven operating business. It has kept advancing its project pathway and strategic options, and keeps it’s place on our list, after a 60% gain over the past year.

• Market cap: A$123.8m
• Revenue TTM: A$0.67m
• EBITDA: -A$5.66m

You might consider if: You are looking for renewable infrastructure, and are ok with financing risk.

Argosy Minerals (ASX: AGY)

Argosy’s sole focus is on the company’s Rincon Lithium Project in the Lithium Triangle region in South America, famed for its abundance of lithium from salt brine production. The company currently owns 77.5% of the project with a 90% ownership following the company’s funding of the production capacity estimated at 10,000 tonnes per annum.

Back in early 2021, investors got the welcome news that the Argosy pilot plant had already produced high-grade lithium carbonate, with 20 tonnes of the 30 tonnes produced sold to Asian customers. The commissioning and increases to full production are on track to begin in 2024. cording to the company announcement, Argosy is set to become only the second ASX-listed producer of lithium carbonate,

Argosy shares are another that stays on the list, having added 205% over the past 12 months. The shares still looks more credible than a lot of lithium juniors, with the Rincon project moving beyond early exploration. It remains a small-cap lithium development story, but there is at least a visible pathway to commercialisation here, rather than just blue-sky geology.

• Market cap: A$95.7m
• Revenue TTM: A$0.91m
• Quarterly revenue growth YoY: 73.5%

You might consider if: You are looking for lithium upside, but prefer a project that has moved closer to commercial form.

City Chic Collective (ASX: CCX)

City Chic qualifies as a beaten down stock stemming from the COVID-19 Pandemic in its early and late stages, coupled with some self-inflicted wounds with inventory management.

The share price has dropped 97.5% over five years and 29% year over year. City Chic shares remain the potential turnaround small cap story in the list. It is not low risk by any means of the imagination, but the latest numbers are more encouraging than the earlier period when the inventory story was unravelling.

• Market cap: A$33.9m
• Revenue TTM: A$135.0m
• EBITDA: A$1.53m
• Quarterly revenue growth YoY: 9.7%

You might consider if: You are open to considering retail turnarounds and accept execution risk.

What Are Penny Stocks All About?

The US markets have elevated their penny stocks to mean any company whose shares are trading for less than $5. Here in Australia, we remain true to the original meaning, a stock trading for under $1.00 AUD per share. However, some continue to consider small cap stocks, or any stock that trades on the ASX for under $5.00.

Penny stocks have both low market caps and stock prices under $1.00 AUD in Australia. The low price lures some new investors looking for potential returns from a large cache of stocks rather than the fewer higher-priced stocks they can afford. No financial expert will recommend investors buy stocks based solely on share price without investigating whether the stock is worth buying, and fundamental analysis plays a role. All the names on our list come along with a set of initial fundamentals to glance over, yet with markets changing regularly, you will want to take some time out to check they remain relevant when you get around to reading this.

Penny stocks are usually penny stocks for a reason, demand is simply not high enough to move market cap, and subsequently share price higher, when considering their risk. Penny stocks are, in almost all cases, start-up companies with low revenue generation and substantial cash outlays to keep the company going. That leaves some penny stock businesses in a constant cycle of borrowing or capital raisings. In effect, these companies are in a race against the clock to generate revenue before the ability to raise capital evaporates.

Some are cheap because they are overlooked, cyclical, or in the middle of a turnaround.

ASX penny and small-cap stocks have more significant growth potential than large caps on the /ASX, but they come with more risk. Penny stocks and most small cap stocks have yet to generate revenue and can be haemorrhaging cash in the race to commence production. Large caps are stable, established companies.

Penny stocks in Australia are stocks with share prices under $1.00 AUD and market caps of around $100 million AUD. Small cap stocks have no standards for share price, but market caps of $100 million or more up to $2 billion dollars, according to Commonwealth Bank.

The need for rigorous research with penny and small-cap stocks is significantly higher than for established blue chip shares or large caps.

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Penny Stocks FAQs

What Are Penny and Small-Cap Stocks?
Penny stocks are stocks that typically trade for under 5 USD per share. In Australia it is any stock trading for less than 1 AUD per share. Small cap stocks are shares in companies that have a market capitalisation between about $250m and $2bn.

How to Buy Penny and Small-Cap Stocks
Penny and small cap stocks can be traded through an Australian broker. Once you’ve chosen a broker and opened an account you will need to research which stocks are a good investment for you. Penny and small cap stocks are a risky investment as the companies tend to be small and have not yet proven themselves over the long term.

How to Find Penny and Small-Cap Stocks
Choosing penny and small cap stocks that will go on to drastically increase in price is not easy. Spending time doing your own research into the company and gathering as much information as you can will increase your chances of success. Stock screeners are a good place to start looking for penny and small cap stocks.

Does the ASX Have Penny Stocks?
Yes. At the time of writing there are over 2500 companies listed on the ASX with a share price of less than $1.