8 Hot Penny Stocks To Invest In According to Hedge Funds

3. Vimeo, Inc. (NASDAQ:VMEO)

Share Price: $4.85

Year to Date Performance: 23.72%

Number of Hedge Fund Holders: 27

Vimeo (NASDAQ:VMEO) operates a video experience platform that offers an elaborate list of video tools via a software-as-a-service (SaaS) model. Its cloud-based tools allow users to collaborate, create, and communicate with video on a single platform. Eliminating barriers to video, the platform solves essential video needs, such as collaboration, creation, hosting, distribution, analytics, and monetization.

The company sells subscription plans, including self-serve and add-ons, Vimeo Enterprise, and others, directly online. The Vimeo Enterprise platform relates to video offerings designed for organizations and teams. The company also provides products and services related to over-the-top (OTT) video monetization solutions, allowing customers to launch and operate their own video streaming channels directly to their audience.

Vimeo (NASDAQ:VMEO) is increasing in popularity, with its revenue increasing by 2% in Q2. It experienced a 55% revenue growth, generating $20 million in free cash flow. It ended the quarter with $311 million in cash and equivalents, highlighting the underlying strength of the company’s business model. Supported by its strong financial foundation, the company has plans to boost investments in growth opportunities in the second half of 2024, focusing on customer success and driving innovation.

The company also holds an advantageous position in the rapidly expanding video market, where 82% of the internet is video. With video formats, content volume, and the number of creators increasing rapidly, Vimeo (NASDAQ:VMEO) stands to benefit from these trends. Its self-serve business caters to a thriving demographic of individual marketers, creators, and learners, positioning the company for substantial growth. The company also repurchased approximately 4 million shares, showing confidence in its business model and utilizing $15 million in capital in Q2. It ranks third on our list of the 8 hot penny stocks to invest in according to hedge funds.