In this article, we examine the 11 Most Undervalued Financial Stocks to Buy According to Wall Street Analysts.
So far in 2025, the US banking and financial sector has been the target of interest rate volatility, regulatory headwinds, and uneven credit conditions. And yet, the KBW Nasdaq Bank Index (tracking US banks) is up 17.87% year-to-date (as of October 1). But despite this gain, valuation multiples across many financial names are depressed relative to historical norms. This leaves scope for re-rating if macro conditions stabilize.
And re-rating will happen, according to expert observers. Morgan Stanley, for instance, stated in an analysis that the US financial industry expects the second half of 2025 to be calmer, especially after the “jolt” from President Trump’s “Liberation Day” announcement in April wears off. Companies “see strength in consumer spending, a favorable interest rate environment, and potential upside from regulatory reframing and artificial intelligence,” the analysis states.
Anshul Sehgal, global co-head of Fixed Income, Currency & Commodities within Goldman Sachs Global Banking and Markets division, takes a similar position. He stated in a July 31 podcast that early in Q4, there will be another leg higher in capital expenditures due to deregulation, “especially in the banking industry.” Put simply, Sehgal expects increased activity and potential benefits for financial stocks linked to the coming regulatory changes.
What this means is that there is a gap between sector fundamentals and market pricing for certain financial stocks. And that several banks, insurers, and asset managers may be poised for substantial upside. With this backdrop, this article highlights 11 financial stocks Wall Street sees as trading below intrinsic value.
Photo by Robb Miller on Unsplash
Our Methodology
To identify the 11 Most Undervalued Financial Stocks to Buy According to Wall Street Analysts, we used the Finviz stock screener to compile an initial list of financial sector companies trading at a forward P/E ratio below 15 as of October 1, 2025. We then narrowed down the selection with analyst-estimated upside potential of more than 20% as of October 1, 2025. We also incorporated hedge fund sentiment data from Insider Monkey’s database of Q2 2025 13F filings to assess institutional interest in each stock. The final list is ranked in ascending order based on upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is straightforward: our research has demonstrated that we can outperform the market by replicating 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).
Most Undervalued Financial Stocks to Buy According to Wall Street Analysts
11. NewtekOne, Inc. (NASDAQ:NEWT)
Upside Potential: 24.45%
Forward P/E: 5.34
Number of Hedge Fund Holders: 14
NewtekOne, Inc. (NASDAQ:NEWT) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 30, the company’s wholly-owned subsidiary, Newtek Merchant Solutions (NMS), secured a $90 million term loan facility and a $5 million revolving line of credit from Private Credit at Goldman Sachs Alternatives. The financing agreement was used in part to fully repay approximately $30 million of NMS’s outstanding term debt with another lender and to close out that lender’s $10 million undrawn line of credit.
The remaining funds are intended for general corporate purposes. The statement said the funds may be used to provide loans to NewtekOne, repay and reduce outstanding unsecured senior debt, and support company growth initiatives.
Barry Sloane, NewtekOne’s Chairman, President, and CEO, stated that they “appreciate Goldman Sachs Alternatives for being a great, long-term financing partner.”
NewtekOne, Inc. (NASDAQ:NEWT) is a financial holding company. It operates Newtek Bank, N.A. and provides small- and medium-sized businesses with services including SBA 7(a) lending, commercial real estate financing, electronic payment processing, payroll solutions, and insurance products.
10. PayPal Holdings, Inc. (NASDAQ:PYPL)
Upside Potential: 26.54%
Forward P/E: 11.60
Number of Hedge Fund Holders: 89
PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 25, PayPal partnered with decentralized finance platform Spark to expand on-chain liquidity, aiming to grow PYUSD deposits from $100 million to $1 billion.
PYUSD, a U.S. dollar-pegged stablecoin issued by Paxos, is now integrated into SparkLend, enabling users to supply and borrow the asset with support from Spark’s $8 billion stablecoin reserve. This model offers predictable liquidity without relying on costly market-maker incentives, positioning PYUSD for rapid scaling.
The collaboration arrives amid a surge in stablecoin activity, with global supply rising by $30 billion to $263 billion and daily volumes exceeding $100 billion. Spark, which previously deployed $630 million in Bitcoin-backed loans to Coinbase, plays a key role in advancing PYUSD’s adoption. PayPal and Spark see this initiative as a blueprint for leveraging DeFi to establish stablecoins as foundational assets in the evolving financial ecosystem.
PayPal Holdings, Inc. (NASDAQ:PYPL) is a digital payments company. It operates a global two-sided network that enables consumers and merchants to send, receive, and process payments through platforms such as PayPal, Venmo, Braintree, Xoom, and Honey. The company’s services include online checkout, peer-to-peer transfers, merchant payment processing, and digital wallets.
9. Virtu Financial, Inc. (NYSE:VIRT)
Upside Potential: 29.18%
Forward P/E: 8.62
Number of Hedge Fund Holders: 33
Virtu Financial, Inc. (NYSE:VIRT) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 11, Jefferies cut its price target for Virtu Financial from $51 to $49 while maintaining its “Buy” rating on the stock. The firm stated that the decision was due to its updated adjusted earnings estimate for Q3 2025, which was cut from $1.02 per share to $0.83 per share.
Jefferies attributed the downgraded earnings forecast to the normalization of market volatility. Specifically, the average level of the VIX index (which measures broader market volatility) is trending 31% lower than the previous quarter. The firm specifically flagged that August 2025’s intraday volatility was about half the level observed in Q2 2025.
Nonetheless, Jefferies considers Virtu to be undervalued. The analysts stated that despite reduced volatility, retail trading engagement remains relatively positive, which supports Virtu’s core revenue streams. They maintained conviction in Virtu’s business model and profitability, referencing its ability to generate strong financial results even during periods of lower volatility.
Virtu Financial, Inc. (NYSE:VIRT) is a financial services company. It leverages proprietary technology to provide market-making, execution services, and multi-asset analytics across global equities, fixed income, currencies, commodities, options, futures, and cryptocurrencies.
8. Federal Agricultural Mortgage Corporation (NYSE:AGM)
Upside Potential: 29.18%
Forward P/E: 8.67
Number of Hedge Fund Holders: 18
Federal Agricultural Mortgage Corporation (NYSE:AGM) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 25, the company announced that CEO Bradford T. Nordholm will retire on March 31, 2027. The Board also appointed Zachary N. Carpenter as President and Chief Operating Officer (COO), effective immediately. Carpenter is currently Executive Vice President and Chief Business Officer. Upon Nordholm’s retirement, Carpenter will take over as CEO.
Nordholm, who became CEO in October 2018, oversaw the doubling of the company’s annual earnings and grew its business volume to over $30 billion. The company also maintained over two decades of consecutive dividend payments during the tenure.
The Board’s choice for a successor followed a year-long, deliberate internal and external evaluation process. The process included amendments to Nordholm’s employment agreement, extending his CEO term to March 31, 2027, and specifying incentive compensation terms for his remaining tenure. Carpenter’s base salary and long-term incentive eligibility were increased as part of the transition.
Federal Agricultural Mortgage Corporation (NYSE:AGM) is a government-sponsored enterprise commonly known as Farmer Mac. It operates as a secondary market for agricultural real estate and rural utility loans. The company purchases and securitizes mortgages originated by approved lenders to provide liquidity and risk management solutions.
7. CleanSpark, Inc. (NASDAQ:CLSK)
Upside Potential: 34.34%
Forward P/E: 12.71
Number of Hedge Fund Holders: 19
CleanSpark, Inc. (NASDAQ:CLSK) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 26, JPMorgan downgraded CleanSpark stock from “Overweight” to “Neutral.” The firm also lowered its price target from $15 to $14, citing valuation concerns.
JPMorgan stated that CleanSpark builds, owns, and operates data centers dedicated to bitcoin mining. It currently operates 50 EH/s (exahash per second), making it one of the four largest publicly listed miners by this metric. The analysts noted that CleanSpark is worth $3.85 billion in market capitalization and has shown 84.7% revenue growth over the last twelve months. Another strength is that the company has a robust financial position; it has a healthy current ratio of 4.37. Overall, JPMorgan described CleanSpark as a “well capitalized, best-in-class operator with M&A expertise.”
Nonetheless, JPMorgan stated shares appear to be fully pricing in the company’s recent expansion to 50 EH/s. As such, the downgrade was primarily on valuation, rather than any operational concerns. The firm indicated it would be more constructive on a pullback.
CleanSpark, Inc. (NASDAQ:CLSK) is a bitcoin mining company. It develops and operates data centers that use low-cost, sustainable energy sources to mine Bitcoin at scale. The company’s primary facilities are located in Georgia, US.
6. SLM Corporation (NASDAQ:SLM)
Upside Potential: 39.99%
Forward P/E: 8.46
Number of Hedge Fund Holders: 42
SLM Corporation (NASDAQ:SLM) is one of the most undervalued financial stocks to buy according to Wall Street analysts. During a presentation at the Barclays Global Financial Services Conference on September 9, the company emphasized a strategic shift towards issuing high-quality student loans rather than just growing its loan book. SLM highlighted its ongoing efforts to cut potential origination volume to improve credit quality.
The company has lowered its origination growth target to 5-6%, choosing to prioritize higher credit quality over increasing loan volume. It also continues to tighten its credit standards; recent loans are of higher quality despite a slight, non-alarming rise in early delinquencies.
SLM noted that legislative changes in Grad PLUS and Parent PLUS loans represent a $4.5 to $5 billion market opportunity. These products cater to borrowers with stronger credit, and SLM’s analysis suggests that the expansion aligns with their risk appetite. To that end, the company is seeking private credit funding partnerships to add capital-light, fee-based streams to complement current strategies.
SLM Corporation (NASDAQ:SLM) is a consumer banking company operating as Sallie Mae Bank. It originates, services, and manages private education loans for undergraduate and graduate students, parents, and career training programs across the United States.
5. Root, Inc. (NASDAQ:ROOT)
Upside Potential: 45.91%
Forward P/E: 3.51
Number of Hedge Fund Holders: 28
Root, Inc. (NASDAQ:ROOT) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 23, the company’s subsidiary, Root Insurance, announced its entry into Washington state. This completes its expansion across the entire West Coast of the United States. The move enables Root to reach over 78% of the US population with its insurance offerings.
Root Insurance’s pricing model is based on real driving behaviors, not traditional demographic factors. The company uses advanced mobile technology and data science to measure actual driving practices via its smartphone app during a mandatory test drive period. Upon signing up for Root, Washington drivers will download the app or go online to register; complete a monitored “test drive” using the app to assess their driving behavior; and may unlock lower rates, choose flexible coverage, and manage the entire policy experience digitally directly on their phone.
The company highlighted potential annual savings of up to $1,200 for safe drivers by using its data-driven pricing model. It stated that it launched in Washington because of the state’s “tech-forward culture.” It aims to offer transparency, affordability, and a modern digital insurance experience.
Root, Inc. (NASDAQ:ROOT) is a technology-driven insurance company. It offers auto, renters, and other property and casualty insurance products through a direct-to-consumer model that operates primarily via its mobile app and website. The company leverages telematics and data analytics to assess driver behavior and price policies more accurately than traditional insurers.
4. Atlanticus Holdings Corporation (NASDAQ:ATLC)
Upside Potential: 50.65%
Forward P/E: 7.87
Number of Hedge Fund Holders: 7
Atlanticus Holdings Corporation (NASDAQ:ATLC) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 18, JMP Securities raised its target price for Atlanticus from $78 to $95. The firm maintained its “Market Outperform” rating on the stock.
JMP made the decision after completing a new analysis after Atlanticus acquired Mercury Financial. The firm updated its assumptions regarding net yield growth for the Mercury portfolio as it optimized fees and annual percentage rates. JMP expects the Mercury acquisition to boost Atlanticus’s earnings per share by approximately $1.00 in 2026 and $3.00 in 2027. JMP reduced its price target, noting that much of the anticipated earnings boost stems from one-time fair value gains on the Mercury portfolio.
Atlanticus Holdings Corporation (NASDAQ:ATLC) is a financial technology company. It operates through two segments: Credit as a Service (CaaS) and Auto Finance. The CaaS segment provides private-label and general-purpose credit cards, while the Auto Finance segment purchases and services loans secured by automobiles from independent dealers.
3. Marex Group PLC (NASDAQ:MRX)
Upside Potential: 59.13%
Forward P/E: 8.09
Number of Hedge Fund Holders: 39
Marex Group PLC (NASDAQ:MRX) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 30, the company announced a strategic partnership with FalconX, an institutional digital asset prime broker. The collaboration will enable the two companies to provide select non-US institutional clients with efficient cross-margining for digital asset derivatives. These derivatives are tradable on both traditional venues, such as the Chicago Mercantile Exchange (CME), and digital asset-native exchanges.
The collaboration covers the clearing and execution of futures and options (F&Os) contracts. As such, it addresses the growing institutional demand for trading derivatives on liquid digital asset markets. This partnership will expand Marex’s client base and enhance its digital assets offering. That way, the company hopes that institutional clients will be able to achieve greater capital efficiency by cross-margining capital deployed across both traditional and digital exchanges.
Marex’s Global Head of Futures & OTC Clearing Sales, Terry Hollingsworth, stated: “Our collaboration with FalconX underscores our commitment to value-add trading services that provide margin relief and broad market access on digital asset derivatives.”
The announcement comes amid Marex’s recent industry-firsts, including enabling clients to access competitive margin benefits via LCH Ltd and FMX Futures Exchange.
Marex Group PLC (NASDAQ:MRX) is a diversified global financial services platform. It provides market access, clearing, hedging, and investment solutions across commodities, equities, fixed income, and foreign exchange markets. The company operates through divisions including Capital Markets, Prime Services, and Clearing.
2. BitFuFu Inc. (NASDAQ:FUFU)
Upside Potential: 73.33%
Forward P/E: 9.01
Number of Hedge Fund Holders: 9
BitFuFu Inc. (NASDAQ:FUFU) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 24, BitFuFu Inc. reaffirmed its commitment to transparency and regulatory compliance in its cloud mining operations.
Managing a total hashrate of 35.6 EH/s as of August 31, 2025, the company highlighted its robust security protocols, daily Bitcoin payouts, and user-friendly model that allows customers to mine without owning or maintaining hardware. BitFuFu also emphasized its adherence to Know Your Customer (KYC) and Anti-Money Laundering (AML) standards, offering customizable mining contracts and pool selection, with rewards settled daily.
The company’s proprietary Aladdin system enables hashrate allocation down to 1 TH/s and supports consistent performance, with over 95% miner uptime and 99.99% platform availability. Founded in 2020, BitFuFu now serves over 636,000 users. It stressed that it does not require security deposits, request transfers to unofficial addresses, or promote offers through unauthorized channels. The announcement comes amid growing interest in cloud mining and Bitcoin accumulation, as users seek trustworthy platforms in an increasingly competitive market.
BitFuFu Inc. (NASDAQ:FUFU) is a digital asset mining company. It develops and operates bitcoin mining facilities and provides cloud-mining services through its strategic partnership with Bitmain. The company’s operations include deploying high-performance mining rigs such as the ANTMINER S21 to enhance efficiency and scale production.
1. PRA Group, Inc. (NASDAQ:PRAA)
Upside Potential: 84.59%
Forward P/E: 11.57
Number of Hedge Fund Holders: 22
PRA Group, Inc. (NASDAQ:PRAA) is one of the most undervalued financial stocks to buy according to Wall Street analysts. On September 24, PRA Group, Inc. announced that its Luxembourg subsidiary has priced a €300 million offering of senior notes due in 2032, carrying a 6.250% interest rate.
Backed on a senior unsecured basis by PRA Group and certain U.S. subsidiaries, the offering is expected to close around September 30. The company highlighted its strong liquidity position, with a current ratio of 13.86, reflecting solid short-term financial health.
Proceeds from the offering will be used to repay approximately $174 million in borrowings under both its North American and European revolving credit facilities, aligning with the company’s broader debt management strategy. With total debt at $3.65 billion, the refinancing is part of a move to optimize its capital structure. The notes will be offered only to qualified institutional buyers under Rule 144A and to certain non-U.S. investors under Regulation S, and are not intended for retail investors in the EEA or UK.
PRA Group, Inc. (NASDAQ:PRAA) is a financial services company. It specializes in the purchase, collection, and management of nonperforming loan portfolios, acquiring unpaid consumer debt from banks, credit unions, and other financial institutions across the Americas, Europe, and Australia. The company operates through its Core and Insolvency segments.
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