In this article, we discuss the 10 Most Undervalued Foreign Stocks to Buy According to Analysts.
The dominance of U.S. stocks within the investment landscape has existed for years, with the S&P 500 index leading with an impressive 14.20% annualized return over the last 15 years. Meanwhile, the MSCI ACWI ex-USA index, which tracks international stocks, has returned 6.5% during the same period. However, the trend seems to be shifting.
In 2025, international stocks have outpaced their U.S. counterparts. So far this year, the ACWI ex-USA index has returned 15.7%, while the S&P 500 index is trailing behind with just a 1.5% return. This reflects the growing investor trend of embracing an “ABUSA” mentality-“Anywhere But the USA.”
Analysts believe that this shift is driven by concerns over U.S. market volatility and the uncertainty surrounding U.S. policies. Amid this, international stocks are showing signs of catching up despite the historical dominance of U.S. stocks. Although investors must exercise caution and avoid drastic portfolio changes, analysts believe that diversifying into foreign stocks could offer long-term benefits.
With this backdrop in mind, let’s discuss the 10 Most Undervalued Foreign Stocks to Buy According to Analysts that may outperform in the coming years.
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Our Methodology
To curate our list of the 10 Most Undervalued Foreign Stocks to Buy According to Analysts, we used the Finviz screener to extract foreign stocks, trading on the U.S. exchanges under a price-to-earnings ratio of 16x. We then assessed analyst sentiment on these stocks and shortlisted stocks based on their upside potential. The 10 Most Undervalued Foreign Stocks to Buy According to Analysts are presented in ascending order of the upside potential. Furthermore, we also considered the hedge fund interest in these stocks, using Insider Monkey’s database that tracks over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. New Oriental Education & Technology Group Inc. (NYSE:EDU)
Forward Price-to-Earnings: 13.07
Upside Potential: 31.81%
Number of Hedge Fund Holders: 32
New Oriental Education & Technology Group Inc. (NYSE:EDU) is included in our list of the 10 Most Undervalued Foreign Stocks to Buy According to Analysts.
On June 27, 2025, Citi upgraded its rating on New Oriental Education & Technology Group Inc. (NYSE:EDU) from ‘Neutral’ to ‘Buy’ rating, while reducing its price target from $77 to $50. The analyst cited strong domestic growth potential as the reason for the upgrade.
Furthermore, Citi projected upside potential for New Oriental Education & Technology Group Inc. (NYSE:EDU) due to the expansion of its high-margin segments, K9 and Senior High. These segments, expanding at 35% and 11% annually, are expected to grow from 45% to 55% of revenue by FY26.
Meanwhile, the company’s cost discipline, particularly rent reductions and controlled hiring, is driving structural margin expansion. According to analysts’ projections, a 1% revenue shift to domestic operations results in an 8-10 basis-point increase in New Oriental Education & Technology Group Inc. (NYSE:EDU)’s margins. With a low forward P/E ratio and a $4.7 billion net cash reserve, there is strong room for capital gains, the analyst notes.
New Oriental Education & Technology Group Inc. (NYSE:EDU), a China-based educational services provider, offers test preparation, tutoring, online learning, and overseas study consulting. It remains on our list of the most undervalued stocks.
9. XP Inc. (NASDAQ:XP)
Forward Price-to-Earnings: 9.8
Upside Potential: 37.54%
Number of Hedge Fund Holders: 29
XP Inc. (NASDAQ:XP) is included in our list of the 10 Most Undervalued Foreign Stocks to Buy According to Analysts.
On June 20, 2025, UBS increased its price target on XP Inc. (NASDAQ:XP) from $17 to $24, maintaining a ‘Buy’ rating. Previously, on June 4, 2025, Goldman Sachs upgraded the stock from ‘Neutral’ to ‘Buy’, with a $23 price target. The analyst attributed the upgrade to the company’s strong operating leverage, a resilient revenue mix, and possible interest rate cuts.
This analyst’s optimism surrounding XP Inc. (NASDAQ:XP)’s outlook follows the R$1 billion share repurchase program in May. The same day, the company canceled over 12 million treasury shares, which decreased its total share count by 2.2%. The cancellation is expected to enhance the company’s shareholder value.
Looking ahead, Goldman Sachs projects a double-digit revenue growth for XP Inc. (NASDAQ:XP) due to consistent fixed income revenue and reduced reliance on equity markets.
XP Inc. (NASDAQ:XP) serves retail, high-net-worth, and institutional clients with its broad range of investment, brokerage, and banking products. It remains on our list of the most undervalued stocks.
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