Last updated: January 29, 2026

5 Undervalued Stocks Worth Watching in 2025

These stocks trade below their historical valuations despite strong business fundamentals. Here’s our take on potential opportunities for value-oriented investors.

TL;DR

• Each of these stocks trades at a significant discount to historical levels or peers
• Our highest-conviction picks: a payments company and a software firm with strong growth
• Higher-risk opportunities: legacy technology companies attempting turnarounds

Key Takeaways

• Low valuations don’t guarantee upside—business quality matters
• Turnaround stories carry binary outcomes: success or failure
• Growth at reasonable price (GARP) combines value and growth approaches
• Position sizing should reflect your confidence level in each pick

Selection Criteria

We looked for stocks with:

• P/E ratios below historical averages or peer groups
• Visible paths to improved profitability or growth acceleration
• Manageable risk profiles (not binary bankruptcies)
• Reasonable catalysts in the near term

1. PayPal (PYPL)

Why it might be undervalued: Trading at levels not seen in roughly 5 years despite continued revenue growth. P/E of roughly 20–25x compared to 50x+ at peak.

Catalysts: New leadership, cost-cutting initiatives, improving Venmo monetization

Risks: Competition from Apple Pay, Stripe, and others; slowing growth rates

What would change my view: Accelerating revenue growth or successful expansion into new markets.

2. Palantir (PLTR)

Why it might be undervalued: Growing revenue roughly 25–35% annually but trading at reasonable software valuations.

Catalysts: Increased AI adoption in government and commercial sectors

Risks: Government budget constraints, competition from established enterprise software players

What would change my view: Major contract wins or significant expansion beyond government business.

3. Intel (INTC)

Why it might be undervalued: Trading at roughly 15–20x earnings versus historical 20–25x. New leadership and potential CHIPS Act benefits could help.

Catalysts: New CEO’s turnaround plan, AI chip development, government incentives

Risks: Continued competition from AMD and NVIDIA, execution challenges in foundry business

What would change my view: Meaningful market share gains in AI chips or successful foundry ramp.

4. Disney (DIS)

Why it might be undervalued: P/E of roughly 15–20x while streaming losses narrow and parks business remains strong.

Catalysts: ESPN streaming launch, achieving streaming profitability, Studio releases

Risks: Cord-cutting pressure on traditional media, high content costs

What would change my view: Streaming business reaching profitability or.

strong Box Office performance

5. Ford (F)

Why it might be undervalued: Trading at roughly 5–7x earnings. Legacy auto is tough, but F-150 remains top seller.

Catalysts: F-150 Lightning EV success, margin improvement in EV business

Risks: Legacy auto margins are structurally low, EV transition is capital-intensive

What would change my view: EV division reaching profitability or significant market share gains.

Valuation Context

These stocks trade at discounts to their historical averages and peer groups for various reasons—past mistakes, competitive pressures, or market sentiment. The question is whether current prices reflect future potential adequately.

Bottom Line

Risks & Watchlist (Next 90 Days)

• Earnings reports—watch for trends in revenue growth and profitability
• Industry developments—competitive moves, regulatory changes
• Macro factors—interest rates, consumer spending, economic conditions
• Company-specific news—leadership changes, major contracts, product launches