12 Best Long-Term Penny Stocks to Buy According to Hedge Funds

2. Sunnova Energy International Inc. (NYSE:NOVA)

Stock Price: $3.43

5-Year Sales Growth: 45.75%

Number of Hedge Fund Holders: 22

Sunnova Energy International Inc. (NYSE:NOVA) specializes in providing solar energy solutions primarily for residential customers. It partners with local dealers and contractors to install solar panels on homes and is a leading player in solar PV systems in the United States. The company also provides various payment plans, such as leases and power purchase agreements (PPAs), which help homeowners adopt solar technology without needing to pay large upfront costs.

Sunnova Energy International Inc. (NYSE:NOVA) is focused on expanding its customer base while maintaining profitability through higher margins and quality credit. In the first nine months of 2024, the company added 76,600 customers, with about 80% being solar customers. Moreover, the company has successfully increased its capital generation through securitizations and tax capital commitments, which have doubled compared to the previous year. The increase in customers resulted in revenue from customer agreements and incentives increasing by 43%, reaching $121.5 million for the nine months ending September 30, compared to the same period last year.

Management not only improved the number of solar energy systems in service by 38%, totaling 222,300 systems but also saw a rise in average revenue per system. Its Power Purchase Agreement (PPA) and lease revenue per system increased by 12% to $1,405. This increase is attributed to slightly larger average system sizes and a higher attachment rate of battery systems, which now stand at 32%. Considering the increased demand for its systems and its total cash of $473.9 million, including $208.9 million in unrestricted cash, it is one of the best long-term penny stocks to buy according to hedge funds.