Penny Stocks to Watch in August 2025: Top 10 in the US

This article highlights the potential for penny stocks in the US market, despite a mixed landscape for major indices. It presents a list of top 10 penny stocks in the US, including Dingdong (Cayman), ATRenew, Waterdrop, and CuriosityStream, all with strong financial health ratings. The article also discusses VAALCO Energy, which has demonstrated financial stability and a strong market cap.

The U.S. market has recently experienced a surge, with major indices like the Dow Jones reaching record highs following Federal Reserve Chair Jerome Powell's indication of potential interest rate cuts. In this context, the allure of penny stocks remains significant, offering investors access to smaller or newer companies that might not be on everyone's radar but could present unique opportunities for growth. Despite their historical connotations, penny stocks can still hold value when they are backed by strong financials and a clear path forward; we'll explore three such examples that stand out in today's market landscape.

Top 10 Penny Stocks in the United States

1. Lantronix (LTRX) - Lantronix, Inc. develops, markets, and sells industrial and enterprise IoT products and services across various global regions with a market cap of $125.62 million. The company generates $143.16 million in revenue from its Computer Networks segment. Lantronix has secured a US$15 million revolving credit facility to bolster working capital and corporate purposes, reflecting financial prudence amidst unprofitability. The company's strategic moves such as the launch of the NTC-500 Series 5G router and collaboration with Teal Drones for defense applications highlight its focus on innovation and market expansion. While Lantronix remains unprofitable, it has reduced losses over five years and maintains sufficient cash runway due to positive free cash flow growth.

2. Coherus Oncology (CHRS) - Coherus Oncology, Inc. is a biopharmaceutical company focused on researching, developing, and commercializing cancer immunotherapies in the United States with a market cap of $124.36 million. The company generates revenue of $272.21 million from its segment focused on developing and commercializing biosimilar products. Despite receiving a Nasdaq deficiency notice for its stock price, the company has demonstrated robust financial management with short-term assets exceeding liabilities and becoming profitable recently. However, significant insider selling raises concerns about internal confidence. The company's recent earnings report showed substantial net income improvement due to large one-off gains, but future earnings are forecasted to decline significantly.

3. Cato Corporation (CATO) - The Cato Corporation, along with its subsidiaries, operates as a specialty retailer of fashion apparel and accessories primarily in the southeastern United States, with a market cap of $53.44 million. Recent earnings reports indicate an increase in quarterly revenue to US$176.51 million and net income to US$6.83 million compared to the previous year, yet the company remains unprofitable overall with a negative return on equity of -15.6%. Despite its financial challenges, Cato's short-term assets exceed both its short and long-term liabilities, indicating solid liquidity management without debt concerns. However, high share price volatility persists alongside declining earnings over recent years, which may impact investor sentiment.

Conclusion

The U.S. market's recent surge has brought renewed interest in penny stocks, offering investors potential growth opportunities. While the landscape remains mixed for major indices, penny stocks can provide unique investment prospects when backed by strong financials and strategic initiatives. Companies like Lantronix, Coherus Oncology, and Cato Corporation demonstrate the potential for growth and innovation within the penny stock realm.

References

[1] https://finance.yahoo.com/news/august-2025s-top-penny-stocks-180844002.html
[2] https://www.morningstar.com/news/business-wire/20250825715878/crescent-energy-to-acquire-vital-energy-in-all-stock-transaction-establishing-a-top-10-independent