Amidst the market volatility, discerning investors are often on the lookout for valuable opportunities in wagering on undervalued stocks. Moreover, the recent market rebound has opened the door to multiple attractive bets, offering robust upside ahead of a sustained bull run next year.
However, identifying the best undervalued stocks requires a nuanced approach. It’s not just about spotting stocks with attractive pricing metrics. Although these metrics can’t be discounted, a comprehensive evaluation must include assessing a stock’s current position and its potential future trajectory, ensuring a well-rounded investment decision.
Therefore, skillfully selecting undervalued stocks in volatile markets offers significant opportunities. This is evidenced by the S&P 500’s growth post-2008 crisis, where a $100 investment would have given a 344.05% return. Such historical trends underscore the potential of these investments, making these stocks a particularly promising choice for discerning investors.
a group of appliances in front of a blue wall, including a washing machine, a refrigerator, a microwave and more
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SharkNinja (NYSE:SN), a standout in the consumer discretionary sector, has made impressive strides in the stock market since its late-summer debut. Since its listing, SharkNinja’s stock has surged remarkably, nearly doubling in value, bolstered by consistent annual sales growth of 20% since 2008 across a diverse product range, including vacuums, coffee makers, and others.
In its latest financial showcase, SharkNinja reported exceptional performance, with revenues soaring to $1.07 billion. This remarkable achievement is further highlighted by a 34% jump in adjusted net income to $133 million. Underpinning these financial triumphs is SharkNinja’s growing investment in research and development, rising by 12.5% in 2023, underscoring its dedication to innovation and expansion into new product categories and markets.
However, the real allure of SharkNinja as a top stock choice lies in its fundamental undervaluation. Wall Street analysts endorse SharkNinja with a ‘Buy’ rating, setting an average price target at $60, signaling a potential 40% bump from current price levels.
Electric Arts Incorporated (EA)
There Doesn't Appear to Be a Clear Path Forward for EA Stock
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Electronic Arts Incorporated (NASDAQ:EA) stands out in the gaming sector with its strong financials and market resilience. Its stock has risen 12.69% year-to-date, with analysts forecasting a promising future, predicting a 12-month price increase to $162.
Moreover, EA’s market position strengthened recently, with its shares jumping 7.6%, surpassing the S&P 500 since releasing its last earnings report. This surge resulted from a notable 37.4% increase in yearly earnings to $1.47 per share, driven by new releases and robust user engagement. These factors collectively underscore EA’s thriving presence in the gaming industry. Furthermore, EA’s strategic NFL licensing, a key to its gaming dominance, has notably elevated the Madden franchise. Moreover, bookings for Madden NFL 24 rose by 6%, as it wrapped up its its second quarter with a comfortable beat across both lines. It’s not the cheapest of the stocks in its category, but it’s trading at almost an 11% discount to its 5-year earnings multiple.
Undervalued Stocks: PayPal (PYPL)
PayPal logo and front of headquarters
PayPal (NASDAQ:PYPL) is a compelling choice for investors due to its undervalued status and a shift towards more efficient operations under new CEO Alex Chriss. His strategic cost-cutting measures are setting the stage for enhanced profitability and are likely to attract major investors, potentially driving up the stock value.
Moreover, in its third quarter, PayPal showcased robust performance with a total payment volume of $387.7 billion, an 8% increase in net revenues, and a notable 20% rise in non-GAAP EPS. The company is actively pushing for further revenue growth in Q4 and plans to buy back $5 billion in shares in fiscal year 2023.
Adding to its appeal, PayPal’s venture into the cryptocurrency world with PayPal USD, a regulated stablecoin, marks a significant advancement. Available on Venmo, PYUSD is quickly gaining traction for efficient online transactions. Furthermore, with an average price target of $74.29, indicating a potential 24% rise from TipRanks analysts, PayPal stands out as a promising investment.
General Electric (GE)
Company breakups: The General Electric GE logo on a building
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General Electric (NYSE:GE) has been a standout performer, with its stock climbing an impressive 84% over the past year. This surge underscores GE’s success in both revenue and earnings during the third quarter, marking a notable transformation. The company’s momentum is further emphasized by its third upward revision of the full-year guidance, showcasing its strategic success and growing dynamism.
The company’s earnings specifics are impressive, with a Non-GAAP EPS of 82 cents, surpassing forecasts by 26 cents. Moreover, GE reported a substantial revenue jump to $17.3 billion, a 19.6% increase year-over-year (YOY), affirming its strong financial health.
Furthermore, GE’s strategy to streamline its operations is yielding results, notably through the spinoff of its healthcare business and the establishment of Aerospace and Vernova as independent entities. These strategic moves are sharpening GE’s focus and promise a bright future. The stock currently holds a moderate buy rating from TipRanks analysts, indicating a potential 9% upside from its present value.
Undervalued Stocks: Torm (TRMD)
Aerial front side view of oil tanker ship sailing on open sea, Imperial Petroleum (IMPP) operates oil tankers
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Torm (NASDAQ:TRMD) is steering its way to success by focusing on premium trades and regions. Their integrated platform, One Torm, plays a pivotal role in bolstering strong customer support and securing access to favorable cargo combinations. This strategy is crucial for optimizing their fleet’s positioning and maximizing earning potential.
Demonstrating its financial prowess, the company has achieved historically high TCE earnings for the first nine months of 2023, outdoing the previous year by 26%. This remarkable performance has enabled TORM to reward its shareholders generously with a substantial dividend distribution totaling $123.2 million.
Furthermore, TipRanks analysts are casting a favorable light on TORM, giving it a moderate buy rating with an upside potential of 37.28%, setting their sights on an average price target of $39 from the current price of $28.4. This forecast indicates a wave of optimism about the company’s future.
Opera (OPRA)
A phone displaying the Opera (OPRA) app
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Opera (NASDAQ:OPRA) is strategically advancing in the tech world, specifically targeting high-value users in Western markets. This approach has led to an 11% increase in Average Revenue Per User (ARPU) quarter-over-quarter and a notable 24% rise YOY, achieving $1.31. Boosting this growth, advertising revenue surged by 24%, contributing 59% to Opera’s total revenue.
Moreover, Opera is intensifying its focus on Aria, an AI-driven feature within its browsers. Aria’s advanced composer architecture taps into various language models, boosting accuracy and offering real-time web insights. This innovative approach is set to transform browsing experiences, aiming to elevate user engagement and propel Opera’s technological advancement.
Furthermore, OPRA is fueling revenue growth by leveraging its massive user base, offering advertisers global reach through real-time bidding. This system efficiently processes high ad requests, significantly boosting brand visibility and return on investment. Additionally, TipRanks analysts suggest a strong buy with an upside potential of 82.46%, underscoring a bright financial forecast for Opera in the tech market.
Luminar Technologies (LAZR)
Luminar (LAZR stock) sign with greenery around it
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Luminar Technologies (NASDAQ:LAZR) is at the forefront of transforming the autonomous vehicle industry with its innovative LiDAR technology. The vehicle autonomy and safety market is on a swift upward trajectory. With forecasts suggesting an impressive surge to a $150 billion valuation by 2030, LAZR’s impactful contributions are becoming increasingly essential.
Financially, Luminar is on a strong trajectory. The company reported a robust 33% YOY increase in revenues, reaching $17 million. More striking is its forward revenue growth estimate of 80.27%, dramatically surpassing the sector median of 5.53% by over 1,300%.
Additionally, LAZR is pioneering in the realm of flying cars through its partnership with Airbus (OTCMKTS:EADSY). CEO Austin Russell’s vision to apply automotive advancements to aviation signifies LAZR’s innovative spirit. With TipRanks analysts giving LAZR a moderate buy rating and a notable 164% upside potential, the company stands out as a forward-thinking player in tech stocks.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
