Penny stocks are attractive simply because of the opportunity for exponential returns. Stocks like Alphabet Inc. (NASDAQ: GOOG), Microsoft Corporation (NASDAQ: MSFT) and Apple Inc. (NASDAQ: AAPL) were once penny stocks but have since provided investor returns counted in quadruple digits. 

Here's a look at four leading candidates for exponential returns that have been beaten down in 2023 for such reasons and are ready to rebound in 2024. 

Luminar Technologies Inc: Self-driving technology gains traction

Luminar Technologies Inc. (NASDAQ: LAZR) is an emerging technology focused on the OEM automobile and truck industry. Its LIDAR and sensing technologies are fundamental to automation and self-driving vehicles, so it has a solid outlook for long-term growth. Today's opportunity is that diminishing demand for EVs and cutbacks to EV programs by OEMs have pressured the stock to historical lows. The analysts aided that move and cut their price targets significantly. 

The upshot is that the stock trades near the analysts' price floor with an equally significant catalyst ahead. Despite the diminished outlook, analysts expect revenue and cash flow to improve in 2024. Top-line growth is forecasted at 150% in F2024 and will accelerate to near 160% in F2025. Analysts also reduced their sentiment but remained committed to the stock, rating it a consensus "hold." 

Blink Charging: Ready to charge cars nationwide

Blink Charging Co. (NASDAQ: BLNK) is another penny stock unduly punished for diminishing demand for EVs. While demand for new EVs has flagged, infrastructure for existing EVs is still lacking. Blink's latest results were optimistic. The company beat on the top and bottom lines and raised its guidance, forecasting possible break-even results next year. This has helped the market to put in a bottom and raises the chance for a short squeeze. 

The short interest runs about 30% in December, and other catalysts are in the works. Ken Griffin's Citadel hedge fund revealed a passive stake in the company, buying about 0.4% of shares, and analysts remain committed. The five tracked by MarketBeat have the stock pegged at "hold" and see the stock price doubling at the low end of their range. 

Petco Health and Wellness: A dog among pet care stocks

Petco Health and Wellness Company Inc. (NASDAQ: WOOF) needs help with its turnaround. The company has failed to gain traction, making its debt and high valuation hard to stomach. A 20% short interest helped to drive the stock to its current lows, where it looks ready to rebound. 

The technical outlook is overextension and divergence compounded by a new turnaround story. The latest earnings call included specific details to reset the business as it focuses on growth, revenue quality and shareholder returns. Analysts, who forecast earnings to grow 50% in 2024 on flat revenue, rate it a "hold" and see it trading near the price floor. Because the pet industry should grow at a 6% CAGR for the next five years, Petco Health and Wellness will likely exceed the consensus outlook. 

Cooking up a reversal with Traeger

Traeger Inc. (NYSE: COOK) shares have wallowed at historic lows for two years following a timely IPO for early investors that coincided with the peaks of the social distancing craze. The stock is trading at historical lows, with several tailwinds beginning to blow. Among them is an end to destocking and industry normalization compounded by hope for FOMC rate cuts and a pick-up in the housing market. 

Analysts at B. Riley noted many factors when the firm initiated the stock at "buy". They see Traeger outperforming relatively easy targets and widening margins due to lower freight costs. The consensus of eight analysts is a firm "hold" with a target of $4.75, or about 68% upside.