Penny stocks can be worth including in your portfolio. They’re high risk, but sometimes they produce phenomenal returns.

Here, I’m going to highlight one penny stock I like the look of today. Trading for just 48p, could it be worth considering for an ISA or Self-Invested Personal Pension (SIPP) as a growth play?

An under-the-radar data and AI company

Made Tech‘s (LSE: MTEC) a small British company that provides digital, data, AI, and technology services to UK government organisations and other regulated industries. It helps customers modernise legacy technology, accelerate digital delivery, strengthen cyber resilience, and harness data and AI so they can operate more efficiently, reduce costs, and deliver services that are more accessible, reliable and effective for users.

I first highlighted the company as a potential investment to consider back in mid-2025 when its shares were trading for 36p. Today, its share price is 48p, so anyone who snapped them up after my initial coverage has generated a return of over 30% in a little over a year, which is fantastic and illustrates the explosive potential of penny stocks.

Strong momentum

Looking at Made Tech today, I still see a ton of investment potential. Because the company operates in a structural growth market and its results continue to be strong.

Take a look at its final results for the year ended 31 May, for example, which were posted last week. For the year, the company generated:

• Revenue of £58.9m, up 27% year on year.
• Adjusted EBITDA of £5.9m, up 69%.
• Operating profit of £4.5m, up 162%.
• Adjusted basic earnings per share of 2.38p, up 73%.

At the end of the period, Made Tech had a backlog worth £83.5m however, this has since blown out to £115m after a major contract win. That new figure represents almost two times last year’s revenue figure meaning the company has strong revenue visibility.

A multi-decade opportunity?

It’s worth noting that in the results, management pointed to a “multi-decade opportunity”. Looking ahead, the UK government needs to support an ageing population, respond to more complex needs, and meet rising expectations from citizens, and technology’s central to overcoming these challenges.

“The long-term opportunity remains substantial. The UK Government needs to modernise public services, improve productivity and make greater use of data, digital technology and AI. Made Tech is increasingly well positioned to play an important role in that transformation.”

Made Tech CEO Rory MacDonald

The stock’s cheap

Now, despite the compelling growth story here, the company sports an attractive valuation today. With analysts forecasting earnings per share of 3.6p for FY27, the forward-looking price-to-earnings (P/E) ratio’s only 13.3.

I see a lot of potential at that valuation. Note that the average 12-month price target’s currently 71.5p, which is almost 50% higher than the current share price.

An attractive set-up

Of course, there are no guarantees the stock will continue to perform well. A slowdown in Government tech spending is a risk.

To my mind though, the set-up looks attractive. I believe this penny stock’s worth considering for the AI era.

Should you invest £5,000 in Made Tech Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Made Tech Group Plc made the list?

Edward Sheldon does not hold any positions in the companies mentioned.