Earlier on January 27, Matt Stucky from Northwestern Mutual joined CNBC’s ‘Closing Bell Overtime’ to discuss a shifting market landscape where investor focus is broadening beyond mega-cap stocks. Stucky observed that earnings revisions are beginning to improve across various sectors, including small caps, which is helping to unlock value dislocations that have accumulated over the last three years. He argued that for small-cap outperformance to continue, the market needs to see consistent upward earnings revisions and a continued compression of the valuation spread between small and large caps.
Regarding portfolio positioning, Stucky expressed interest in mid-caps, small-caps, international stocks, and investment-grade fixed income, moving away from a primary focus on US mega-caps. While he clarified that he still respects the quality and earnings growth of mega-cap tech companies, he expressed concern over the unusual level of market concentration and the risks associated with potential disappointments in that sector. He suggested that the next leg in the trade for AI may lie with small and mid-cap companies that use AI products to unlock productivity. Because these smaller companies are more labor-intensive than mega-cap tech firms, Stucky believes that they may possess more earnings leverage if AI proves to be a major productivity enhancer over the next few years.
That being said, we’re here with a list of the 11 most undervalued penny stocks to buy right now.
Our Methodology
We used screeners to identify stocks that are trading below a forward P/E of 15 as well as below $5 per share, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on February 23.
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 Penny Stocks to Buy Right Now
11. Citius Oncology Inc. (NASDAQ:CTOR)
Citius Oncology Inc. (NASDAQ:CTOR) is one of the most undervalued penny stocks to buy right now. On February 11, Citius Oncology entered into an exclusive distribution agreement with Uniphar to expand the availability of its oncology treatment, LYMPHIR, throughout Western and Eastern Europe. This partnership marked Citius Oncology’s third major international agreement, following similar arrangements in the Middle East, Turkey, and Southern Europe.
Under the terms, Uniphar will manage market access and distribution through country-specific managed access programs. While LYMPHIR is currently FDA-approved in the US, it has not yet received commercial marketing authorization in Europe; therefore, it will be provided solely to patients with relapsed or refractory cutaneous T-cell lymphoma/CTCL who have limited treatment options under local legal frameworks.
LYMPHIR is a targeted immunotherapy designed specifically for patients with Stage I-III CTCL who have already undergone at least one systemic therapy. The drug functions as a recombinant fusion protein that combines an IL-2 receptor binding domain with diphtheria toxin fragments to selectively identify and destroy cancerous T-cells. By inhibiting protein synthesis within these targeted cells, LYMPHIR induces cell death and depletes immunosuppressive regulatory T-cells.
Citius Oncology Inc. (NASDAQ:CTOR) develops and commercializes innovative targeted oncology therapies. It also develops LYMPHIR, an orphan indication for the treatment of adult patients with relapsed or refractory cutaneous T-cell lymphoma, a rare form of non-Hodgkin lymphoma.
10. Ceragon Networks Ltd. (NASDAQ:CRNT)
Ceragon Networks Ltd. (NASDAQ:CRNT) is one of the most undervalued penny stocks to buy right now. On February 17, Ceragon Networks reported Q4 2025 revenue of $82.3 million, which was a 23% decline compared to the same period in 2024. This downward trend was reflected in the full-year results, with 2025 revenue totaling $338.7 million, down 14.1% from the previous year.
Management expressed optimism for 2026, setting revenue guidance at $355 to $385 million. Growth for Ceragon Networks Ltd. (NASDAQ:CRNT) is expected to be fueled by the launch of four new products, including 60 GHz point-to-multipoint solutions, and a multimillion-dollar private network contract recently secured in the Asia-Pacific region.
The CEO highlighted that while Q1 2026 will likely follow typical seasonal patterns, strong bookings from India and stable Tier 1 demand in North America provide confidence in a stronger H2 performance. The company is actively diversifying its revenue streams through private networks in the mining and energy sectors and is mitigating supply chain costs, such as rising memory prices, by qualifying secondary sources.
Ceragon Networks Ltd. (NASDAQ:CRNT) provides wireless transport solutions for cellular operators and other wireless service providers in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America.
9. Commerce.com Inc. (NASDAQ:CMRC)
Commerce.com Inc. (NASDAQ:CMRC) is one of the most undervalued penny stocks to buy right now. On February 12, Commerce.com reported fiscal year 2025 revenue of $342 million, which was a 3% year-over-year increase, with Q4 contributing $89.5 million. The company achieved significant operational efficiency, expanding its non-GAAP operating margin by 230 basis points over 2024 and nearly 1,000 basis points over 2023. GMV reached nearly $32 billion, up 12%, while subscription ARR from B2B customers saw a robust growth of nearly 20%.
Despite these gains, the company faced challenges with its net revenue retention, which stood at 95.2%, and a slightly lower take rate due to a higher mix of B2B transactions that use fewer credit card payments. Management noted that while B2B is a high-growth area, it currently yields a lower revenue share than B2C. To counter this, Commerce.com Inc. (NASDAQ:CMRC) is shifting its focus from foundational building to aggressive monetization.
For 2026, the company provided a broad guidance range with revenue projected between $347.5 and $369.5 million, reflecting both macroeconomic caution and optimism regarding new product launches. The CEO highlighted the company’s strategic positioning as an AI-ready infrastructure layer through partnerships with OpenAI, Google, and Microsoft.
Commerce.com Inc. (NASDAQ:CMRC) operates a SaaS e-commerce platform for brands and retailers in the US, North and South America, Europe, the Middle East, Africa, and the Asia Pacific.
8. CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCC)
CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCC) is one of the most undervalued penny stocks to buy right now. On February 16, Josh Valdez officially assumed his role as Chief Product Officer for CCC Intelligent Solutions, following an earlier announcement of his appointment on January 30. Valdez is responsible for overseeing the company’s comprehensive product strategy, design, and delivery. His primary mission involves scaling AI-driven technologies across CCC Intelligent Solutions’ cloud platform to enhance value for a diverse client base within the property and casualty insurance economy.
Valdez is recognized as a seasoned product innovator with extensive experience in building platform-based technology businesses. He possesses specialized expertise in AI, particularly agentic AI, and focuses on creating solutions that harmonize human expertise with intelligent automation. This background is intended to help CCC Intelligent Solutions navigate the increasing complexity of the insurance and automotive industries by improving decision-making and operational efficiency.
Before joining CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCC), Valdez held significant leadership roles at major technology firms, including serving as Senior Vice President of Products at Dayforce and Vice President of Platform at Workday. His career also includes five years in senior strategy and technology positions at Google and the co-founding of Pattern, an intelligent workspace startup.
CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCC) operates as a SaaS company for the property and casualty insurance economy in the US and China.
7. Banco Bradesco (NYSE:BBD)
Banco Bradesco (NYSE:BBD) is one of the most undervalued penny stocks to buy right now. On February 5, Banco Bradesco announced that it concluded 2025 with a recurring net income of BRL 24.7 billion, representing 26.1% year-over-year growth. This performance marked the first time the bank exceeded its cost of capital since initiating its five-year transformation plan in 2024. Key operational drivers included an 11% expansion in the loan portfolio and a robust 16.1% increase in insurance results.
Management attributed these gains to a disciplined AI First strategy and structural shifts that increased digital retail engagement while gaining market share in the high-growth SME segment, which reached 16.6%. The bank’s strategic overhaul focused on segmenting its client base and modernizing its technological infrastructure, resulting in 19 million fully digital clients and a 40x reduction in the cost to serve them.
Banco Bradesco (NYSE:BBD) also intensified its focus on affluent markets through its Prime and Principal offerings, the latter of which expanded to 62 offices across 36 municipalities by year-end. Technology investments rose 22% in 2025, facilitating a threefold increase in internal delivery capacity. Despite these successes, the bank continues to manage a footprint reduction, having closed 2,800 service points over the last two years to optimize its physical network.
Banco Bradesco (NYSE:BBD), together with its subsidiaries, provides various banking products and services in Brazil and internationally. The company operates in two segments: Banking and Insurance.
6. Digital Turbine Inc. (NASDAQ:APPS)
Digital Turbine Inc. (NASDAQ:APPS) is one of the most undervalued penny stocks to buy right now. On February 3, Digital Turbine reported FQ3 2026 earnings, reporting a 12% year-over-year revenue increase to $151.4 million. The company’s international business was a primary catalyst, surging over 60% compared to the previous year. Profitability saw a significant boost as EBITDA grew by 76% year-over-year, with margins expanding to 26%.
Despite the strong international momentum, the company continues to navigate persistent softness in US device volumes and intense competitive pressure within the gaming and app distribution sectors. Financial constraints were also evident in the relatively low free cash flow of $6.4 million for the quarter and the termination of the company’s at-the-market equity program, which may signal a more cautious approach to capital management.
The CEO highlighted the successful integration of AI and ML, which has driven a 25% increase in gross profit dollars while simultaneously reducing operating expenses. Digital Turbine Inc. (NASDAQ:APPS) also confirmed that the three largest global gaming companies are now live using its Single Tap technology to streamline app distribution and reduce friction for users.
Digital Turbine Inc. (NASDAQ:APPS), through its subsidiaries, operates a mobile growth platform for advertisers, publishers, carriers, and device OEMs. It operates through two segments: On Device Solutions and App Growth Platform.
5. AmpliTech Group Inc. (NASDAQ:AMPG)
AmpliTech Group Inc. (NASDAQ:AMPG) is one of the most undervalued penny stocks to buy right now. On February 19, AmpliTech Group announced the launch of two new 5G base station units designed to support global Open RAN (O-RAN) deployments. The new hardware targets Band 2 (PCS 1900 FDD) and Band 41/n41 (2.5 GHz TDD), which are critical spectrum bands for high-demand urban networks and private 5G systems.
These radios are engineered for seamless integration into modern architectures, featuring O-RAN Split 7-2a support and specialized telecom power configurations to facilitate industrial automation, smart city deployments, and fixed wireless broadband. The expansion significantly broadens AmpliTech’s addressable market across North America, Latin America, Asia, and the Middle East.
By securing key O-RAN certifications, AmpliTech Group Inc. (NASDAQ:AMPG) aims to reduce deployment risks and interoperability testing costs for its customers, thereby accelerating the transition from legacy infrastructure to open, software-defined networks. The CEO noted that these strategic releases are available for immediate evaluation, positioning the company to capture growth in both public carrier upgrades and the rapidly expanding private 5G sector.
AmpliTech Group Inc. (NASDAQ:AMPG) designs, engineers, and assembles microwave component-based amplifiers. It operates in two segments: Manufacturing & Engineering and Distribution.
4. Agenus Inc. (NASDAQ:AGEN)
Agenus Inc. (NASDAQ:AGEN) is one of the most undervalued penny stocks to buy right now. On February 19, Agenus presented new translational and clinical biomarker data from its Phase 1b C-800-01 trial, focusing on the combination of botensilimab/BOT and balstilimab/BAL. The study highlighted the therapy’s effectiveness in immunologically cold tumors, such as microsatellite-stable metastatic colorectal cancer/MSS mCRC, which typically resist standard immunotherapies.
In a group of 341 evaluable patients, the combination achieved an objective response rate of 17% and a median overall survival of 17.2 months, with a 24-month survival rate of 38%. The research introduced a biologically grounded approach to patient stratification by balancing systemic inflammation markers in the blood against immune activity within the tumor microenvironment.
Findings indicated that while high systemic inflammation correlates with poorer outcomes, BOT+BAL can provide clinical benefits even in patients with low levels of immune infiltration that would normally disqualify them from conventional checkpoint inhibitor treatment. This suggests that the Fc-enhanced mechanism of botensilimab lowers the necessary threshold of baseline immunity required for a successful clinical response. Agenus Inc. (NASDAQ:AGEN) continues to develop its pipeline of immunological agents, using these findings to expand the population of patients who can benefit from next-gen cancer immunotherapies.
Agenus Inc. (NASDAQ:AGEN) is a clinical-stage biotechnology company that discovers and develops therapies to activate the body’s immune system against cancer and infections internationally.
3. Alliance Entertainment Holding Corporation (NASDAQ:AENT)
Alliance Entertainment Holding Corporation (NASDAQ:AENT) is one of the most undervalued penny stocks to buy right now. On February 12, Alliance Entertainment reported earnings for FQ2 2026, which was marked by a net income of $9.4 million and an adjusted EBITDA of $18.5 million. Performance was particularly supported by a 33% surge in physical movie revenue, which was driven by premium 4K Ultra HD and collectible editions and a 31% increase in the collectibles segment.
Partnerships with major studios like Paramount and Amazon MGM have further enhanced the company’s retail visibility and pricing power. Despite the profitability gains, total net revenue declined to $369 million from $394 million in the prior year. This drop was largely fueled by a $34 million slump in the arcade business and supply chain constraints affecting Microsoft gaming consoles.
While the company saw success with Nintendo products, the broader gaming hardware category remained soft. Alliance Entertainment Holding Corporation (NASDAQ:AENT) is now actively exploring M&A opportunities and the launch of ‘Alliance Authentic,’ which uses NFC technology to add digital value to physical collectibles.
Alliance Entertainment Holding Corporation (NASDAQ:AENT) operates as a wholesaler and e-commerce provider for the entertainment industry. It offers vinyl records, video games, digital video discs, Blu-rays, toys, compact discs, collectibles, and other entertainment products.
2. Accendra Health Inc. (NYSE:ACH)
Accendra Health Inc. (NYSE:ACH) is one of the most undervalued penny stocks to buy right now. On February 19, Accendra Health reported full-year 2025 revenue of nearly $2.8 billion, which was a 3% year-over-year increase. Despite this growth, Q4 adjusted EBITDA fell to $90 million from $102.5 million in the prior year, bringing the annual total to $375 million. This progress was supported by the sale of the company’s former products and healthcare services business, allowing the firm to focus on its core home-based care brands, Byram and Apria.
Accendra Health Inc. (NYSE:ACH) faces significant headwinds heading into 2026, primarily due to the loss of a large commercial payer, which is expected to reduce revenue by $300 million. Consequently, 2026 revenue guidance is set at $2.55 to $2.65 billion, with adjusted EBITDA projected at $335 to $355 million. Management also noted challenges from inflationary product costs and stranded costs related to the recent divestiture.
These factors are expected to result in a weaker H1 2026, with only 40% of the year’s adjusted EBITDA anticipated during that period as cost-reduction initiatives ramp up. Strategic priorities for the coming year center on debt reduction and operational efficiency through technology, such as the MyApria app. The CFO projected free cash flow of at least $100 million for 2026.
Accendra Health Inc. (NYSE:ACH), together with its subsidiaries, operates as a healthcare solutions company in the US. It offers a range of products & services for in-home care & delivery for diabetes treatment, home respiratory therapy, and obstructive sleep apnea treatment.
1. Ambev (NYSE:ABEV)
Ambev (NYSE:ABEV) is one of the most undervalued penny stocks to buy right now. On February 12, Ambev reported its Q4 2025 financial results, where the company achieved a stated net income of nearly 16 billion BRL, with EPS increasing by 8.2% year-over-year. The company’s digital ecosystem saw robust performance, with the B2B marketplace GMV growing 70% and consumer delivery GMV rising 13% to 4.7 billion BRL. Quarterly revenue totaled $4.76 billion, which modestly rose by 2.31% year-over-year.
Despite financial growth, the company faced volume pressures due to unfavorable weather conditions in Brazil and a slower-than-expected consumption recovery in Argentina. These factors, alongside weather-related disruptions in out-of-home socialization, impacted the core beer segment and contributed to a 1.6 billion BRL decrease in operating cash flow compared to the previous year.
Cost pressures for Ambev (NYSE:ABEV) also persisted, particularly regarding aluminum and commodities, with Brazilian beer cash COGS per hectoliter increasing by 6.1%. Net financial expenses reached nearly 4 billion BRL, primarily driven by foreign exchange variation losses. Looking ahead to 2026, the CEO noted that while early 2025 was impacted by the La Nina phenomenon, weather conditions began to neutralize by January this year.
Ambev (NYSE:ABEV), through its subsidiaries, produces, distributes, and sells beer, draft beer, soft drinks, malt and food, and other beverages in Brazil, Central America and the Caribbean, Latin America South, and Canada.
While we acknowledge the potential of ABEV 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 ABEV and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
