On January 27, Matt Stucky of Northwestern Mutual joined ‘Closing Bell Overtime’ on CNBC to discuss the shifting dynamics of the 2026 stock market and the broadening of investor interest beyond mega-cap tech names. He explained that while high interest rates previously restricted growth to narrow infrastructure plays, the current environment of falling rates is allowing cyclical sectors and small-cap companies to gain momentum. This transition has led to improved earnings revisions across these neglected segments, serving as the primary catalyst for unlocking value that had been suppressed for three years. Stucky emphasizes that the recipe for continued outperformance lies in consistent upward earnings revisions and the further compression of the valuation spread between small and large caps.
Regarding portfolio strategy, Stucky clarified that while he is moving down the cap scale toward mid and small caps, as well as into international stocks and investment-grade fixed income, he is not abandoning mega-cap tech. He respects the quality and earnings growth of the MAG7 but warned that extreme market concentration increases the risk profile should disappointments occur. He posits that the next leg of the trade belongs to companies that use the AI products being built by the tech giants. Because mid and small-cap companies are more labor-intensive, they stand to benefit the most from AI-driven productivity gains. Stucky concluded that if these technologies serve as significant productivity enhancers over the next few years, the earnings leverage will shift toward the users of these tools, providing a strong reason for optimism in broader market segments.
That being said, we’re here with a list of the 11 most undervalued mid cap stocks to buy now.
Our Methodology
We sifted through the Finviz stock screener to compile a list of stocks that had a forward P/E ratio under 15 and were trading between $2 billion and $10 billion. We then selected 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on February 12.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11 Most Undervalued Mid Cap Stocks to Buy Now
11. Axalta Coating Systems Ltd. (NYSE:AXTA)
Number of Hedge Fund Holders: 46
Axalta Coating Systems Ltd. (NYSE:AXTA) is one of the most undervalued mid cap stocks to buy now. On February 11, UBS analyst Joshua Spector raised the firm’s price target on Axalta Coating to $36 from $35 and maintained a Neutral rating.
On the same day, Baird raised its price target on Axalta Coating to $37 from $35 while maintaining a Neutral rating. The firm updated its financial model following the company’s Q4 2025 results and noted that execution remains solid.
BMO Capital also raised its price target on Axalta Coating Systems Ltd. (NYSE:AXTA) to $35 from $33 while keeping a Market Perform rating. The firm noted that the company’s Q4 results continued a trend observed throughout 2025, with the Refinish segment underperforming expectations due to struggling volumes in North America. BMO Capital added that it remains unconvinced of a near-term inflection or improvement in the Refinish business.
Axalta Coating Systems Ltd. (NYSE:AXTA), through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It has two segments: Performance Coatings and Mobility Coatings.
10. Booz Allen Hamilton Holding Corp. (NYSE:BAH)
Number of Hedge Fund Holders: 47
Booz Allen Hamilton Holding Corp. (NYSE:BAH) is one of the most undervalued mid cap stocks to buy now. On January 27, UBS raised its price target on Booz Allen to $97 from $93 while maintaining a Neutral rating. This firm noted that while topline visibility remains limited, the company’s earnings are holding up.
A day before that, Stifel raised its price target on Booz Allen to $115 from $106 with a Hold rating. The firm described Booz Allen’s FQ3 results as surprise-free and noted that revenue missed expectations and earnings beat, while management largely maintained its full-year outlook. The firm indicated that it is looking for signs of underlying acceleration to drive the stock’s future performance.
On January 23, Truist raised its price target on Booz Allen Hamilton Holding Corp. (NYSE:BAH) to $98 from $90 with a Hold rating. The firm increased its FY 2027 and FY 2028 EPS estimates to reflect tax-related tailwinds and anticipated cost reductions. Truist noted that the company could benefit from projected growth in defense spending and incremental One Big Beautiful Bill funding, though it expects civil spending to be a primary target for future cuts in the coming years.
Booz Allen Hamilton Holding Corp. (NYSE:BAH) is a technology company that provides technology solutions using AI, cyber, and other technologies for the government’s cabinet-level departments and commercial customers in the US and internationally.
9. Avantor Inc. (NYSE:AVTR)
Number of Hedge Fund Holders: 50
Avantor Inc. (NYSE:AVTR) is one of the most undervalued mid cap stocks to buy now. On February 12, Bank of America analyst Michael Ryskin lowered the firm’s price target on Avantor to $11 from $13 and kept a Neutral rating. This decision followed a sharp market reaction to a soft FY 2026 guidance.
The firm noted that visibility into a potential recovery remains limited as management has yet to provide a clear path to improvement, leading to expectations that the shares will remain under pressure. The revised price target reflects these lower growth and multiple assumptions.
On the same day, Citi lowered its price target on Avantor Inc. (NYSE:AVTR) to $11 from $13 and maintained a Neutral rating following the company’s Q4 2025 results and FY 2026 guidance, which came in below expectations. The firm particularly noted that investors may not view the guidance as conservative, especially given the required ramp-up from Q1 earnings-per-share, which was guided well below expectations at $0.15 to $0.16.
Avantor Inc. (NYSE:AVTR) provides mission-critical products and services to customers in the biopharma, healthcare, education & government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa.
8. Match Group Inc. (NASDAQ:MTCH)
Number of Hedge Fund Holders: 50
Match Group Inc. (NASDAQ:MTCH) is one of the most undervalued mid cap stocks to buy now. On February 4, TD Cowen lowered its price target on Match Group to $37 from $40 with a Buy rating following solid Q4 2025 results. The firm particularly reduced its long-term estimates for the company.
On the same day, Truist lowered its price target on Match Group to $34 from $35 and kept a Hold rating. The firm noted that better-than-expected Q4 2025 results indicate that the company is seeing green shoots from its new product initiatives and testing.
Morgan Stanley also lowered its price target on Match Group Inc. (NASDAQ:MTCH) to $35 from $37 while maintaining an Equal Weight rating. The firm noted that Tinder’s FY 2026 revenue guidance was better than feared, and leading indicators are improving. However, the firm stated that Project Aurora did not prove to be the silver bullet bulls had hoped for, leaving the timing and magnitude of the Tinder turnaround unclear.
Match Group Inc. (NASDAQ:MTCH) provides digital technologies. It operates through four segments: Tinder, Hinge, Evergreen & Emerging, and Match Group Asia.
7. Brinker International Inc. (NYSE:EAT)
Number of Hedge Fund Holders: 51
Brinker International Inc. (NYSE:EAT) is one of the most undervalued mid cap stocks to buy now. On February 2, Goldman Sachs analyst Christine Cho raised the firm’s price target on Brinker to $200 from $180 and kept a Buy rating.
On January 29, Morgan Stanley raised its price target on Brinker to $205 from $200 and maintained an Overweight rating following what it called another good quarter and an increase in fiscal year guidance. The firm believes that strong fundamentals will continue and views current numbers as beatable, though it noted that the extent of future gains is uncertain given the stock’s recent performance.
Bank of America also raised its price target on Brinker International Inc. (NYSE:EAT) to $210 from $198 while maintaining a Buy rating following another beat and raise quarter. The firm believes that the company’s updated guidance is very achievable and revised its own FY 2026 EPS forecast higher to $10.62 from $10.59 to reflect the Q2 2025 earnings beat.
Brinker International Inc. (NYSE:EAT), together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants in the US and internationally.
6. KBR Inc. (NYSE:KBR)
Number of Hedge Fund Holders: 51
KBR Inc. (NYSE:KBR) is one of the most undervalued mid cap stocks to buy now. On January 26, Citi lowered its price target on KBR to $53 from $57 while keeping a Buy rating. This announcement was made as the firm adjusted its outlook for the engineering and construction sector ahead of Q4 2025 earnings. The firm anticipates solid results and initial 2026 guidance in line with consensus expectations across the industry, specifically highlighting the growth potential for companies like KBR that have exposure to increasing data center expenditures.
In other news, on January 12, KBR was awarded the FEED (front-end engineering design) contract for the Coastal Bend LNG project, which is a natural gas liquefaction and export facility on the Texas Gulf Coast. The facility is designed to feature multiple liquefaction trains and will use ConocoPhillips’ Optimized Cascade Process technology alongside Honeywell UOP technologies to reduce greenhouse gas emissions and remove heavy hydrocarbons.
KBR will lead the FEED effort for the ISBL (inside battery limits) scope and support the project’s regulatory filings and permitting with the FERC. The collaboration aims to set a new standard for low-carbon LNG production by maximizing operational efficiency and minimizing carbon intensity. Coastal Bend LNG, a privately held developer, selected KBR due to its five decades of expertise in the sector and its focus on industrial decarbonization.
KBR Inc. (NYSE:KBR) provides scientific, technology, and engineering solutions to governments and commercial customers worldwide. It operates through Government Solutions and Sustainable Technology Solutions segments.
5. Lyft Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 51
Lyft Inc. (NASDAQ:LYFT) is one of the most undervalued mid cap stocks to buy now. On February 11, Bank of America lowered its price target on Lyft to $17 from $19 with an Underperform rating. This adjustment was made as the firm noted a 16% decline in after-hours trading.
The firm attributed the drop to a Q4 2025 rides miss, a lower Q1 EBITDA outlook, and a lack of insurance savings, which collectively highlight a highly competitive environment. Additionally, BofA observed that while Lyft’s autonomous vehicle commentary remained consistent, the company faces elevated competitive risks from Uber.
Truist lowered its price target on Lyft Inc. (NASDAQ:LYFT) to $18 from $23 while keeping a Hold rating. The firm noted that the company’s in-line Q4 2025 results demonstrate continued improvements in marketplace health, supported by user experience enhancements, new product initiatives, M&A, and a growing partner portfolio. However, the firm pointed out that a more promotional environment led to a slowdown in rides’ growth.
Lyft Inc. (NASDAQ:LYFT) operates a peer-to-peer marketplace for on-demand ridesharing in the US and Canada. The company operates multimodal transportation networks that offer access to various transportation options through the Lyft platform and mobile-based applications.
4. Molina Healthcare Inc. (NYSE:MOH)
Number of Hedge Fund Holders: 51
Molina Healthcare Inc. (NYSE:MOH) is one of the most undervalued mid cap stocks to buy now. On February 12, Goldman Sachs lowered its price target on Molina Healthcare to $124 from $167 while keeping a Neutral rating. This adjustment was made following the company’s Q4 2025 earnings miss.
The firm noted that the return profiles for even the strongest operators in low-margin, government-priced cyclical businesses can diminish rapidly during a broad-based downturn. Goldman Sachs expects these challenges to persist, reflecting the sensitivity of managed care organizations to the current cyclical environment.
Earlier on February 9, UBS analyst AJ Rice lowered the firm’s price target on Molina Healthcare Inc. (NYSE:MOH) to $145 from $170 while maintaining a Neutral rating. AJ Rice noted that the backdrop for Medicaid and exchanges remains challenged.
Molina Healthcare Inc. (NYSE:MOH) provides managed healthcare services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces in the US. It operates in four segments: Medicaid, Medicare, Marketplace, and Other.
3. Sprouts Farmers Market Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 53
Sprouts Farmers Market Inc. (NASDAQ:SFM) is one of the most undervalued mid cap stocks to buy now. On February 4, Goldman Sachs analyst Leah Jordan lowered the firm’s price target on Sprouts Farmers Market to $130 from $152 while maintaining a Buy rating. Despite the target cut, the firm expects the company to post solid Q4 2025 results.
Goldman Sachs also particularly highlighted the company’s differentiated position in organic groceries and wellness trends. Jordan noted that a new loyalty program and a strong balance sheet support a reacceleration of top-line growth in the second half of the year, providing an attractive valuation for investors.
Earlier on January 8, Deutsche Bank analyst Krisztina Katai resumed coverage of Sprouts Farmers Market Inc. (NASDAQ:SFM) with a Hold rating and an $88 price target. This initiation was part of a broader resumption of coverage across the broadlines and food retail sectors.
Sprouts Farmers Market Inc. (NASDAQ:SFM), together with its subsidiaries, retails fresh, natural, and organic food products in the US. It sells its products under the Sprouts brand.
2. Sirius XM Holdings Inc. (NASDAQ:SIRI)
Number of Hedge Fund Holders: 54
Sirius XM Holdings Inc. (NASDAQ:SIRI) is one of the most undervalued mid cap stocks to buy now. On February 10, JPMorgan analyst Sebastiano Petti upgraded Sirius XM to Neutral from Underweight, while raising the price target to $24 from $20. The upgrade followed better-than-expected Q4 2025 results and improving subscriber trends. The firm expressed encouragement regarding Sirius XM’s new product contributions, advertising trends, and monetization efforts, while noting the company’s progress toward deleveraging.
Additionally, on February 6, Seaport Research downgraded Sirius XM Holdings Inc. (NASDAQ:SIRI) to Neutral from Buy and removed its price target. Although the company’s new revenue and EBITDA guidance for 2026 is stable compared to 2025 (driving a relief rally after years of negative growth forecasts) the firm lowered its own estimates.
This reduction reflects expectations for moderately worse self-pay net losses in 2026, slower ARPU growth, and the fact that most cost savings from the previous year are being redeployed into new initiatives rather than boosting the bottom line.
Sirius XM Holdings Inc. (NASDAQ:SIRI) operates as an audio entertainment company in North America. It operates through two segments: Sirius XM, Pandora, and Off-platform.
1. Monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 55
Monday.com Ltd. (NASDAQ:MNDY) is one of the most undervalued mid cap stocks to buy now. On February 10, TD Cowen lowered its price target on Monday.com to $125 from $200 with a Buy rating. The firm noted that Q2 results were below expectations due to disruption in paid search channels from AI search, though it highlighted that upmarket momentum remains a strong point for the company.
DA Davidson lowered its price target on Monday.com on the same day to $100 from $150 with its Buy rating. The firm noted that the company’s quarterly beat was smaller than usual due to uncertain demand trends within its small and medium-sized business customer base. Consequently, management’s guidance for the upcoming period fell short of consensus analyst expectations.
Cantor Fitzgerald analyst Thomas Blakey also lowered the firm’s price target on Monday.com Ltd. (NASDAQ:MNDY) to $95 from $148 while keeping an Overweight rating. Blakey noted that the company is expected to face reduced forecasts for 2026 and 2027, entering a more stringent ‘show me’ phase. This shift follows management’s signal that it will no longer discuss its previously stated $1.8 billion revenue target for 2027.
Monday.com Ltd. (NASDAQ:MNDY), together with its subsidiaries, develops software applications internationally. The company provides Work OS, a cloud-based visual work OS that consists of modular building blocks used and assembled to create software applications and work management tools.
While we acknowledge the potential of MNDY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MNDY and that has 100x upside potential, check out our report about this cheapest AI stock.
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