12 Most Undervalued Small Cap Stocks to Invest In Now

5. Select Medical Holdings Corporation (NYSE:SEM)

​Market Cap: $1.76 billion

Forward P/E: 12.37

Number of Hedge Fund Holders: 25

Select Medical Holdings Corporation (NYSE:SEM) is one of the most undervalued small cap stocks to invest in now. Select Medical Holdings Corporation (NYSE:SEM) received a rating update from Benchmark Co. analyst Bill Sutherland on October 27, who maintained a Buy rating on the stock with a $21 price target.

RBC Capital also lifted its price target on the stock to $20 from $16 on October 8 and maintained an Outperform rating on the shares. The firm told investors that it considers the dislocation seen in the stock as an attractive entry point with lifting regulatory headwinds.

It added that the firm’s higher price target shows an easing of regulatory headwinds and a more appropriate LTAC multiple assumption going into the future.

Similarly, Select Medical Holdings Corporation (NYSE:SEM) received a Buy rating from Bank of America Securities analyst Joanna Gajuk on October 8, who set a $15 price target for the shares.

The analyst based the rating update on the recent delay of the 20% Rule by CMS, potentially helping the company reverse a considerable reserve it had booked earlier in the year. The analyst expects this factor to enhance Select Medical Holdings Corporation’s (NYSE:SEM) financial outlook for fiscal Q3 2025.

Select Medical Holdings Corporation (NYSE:SEM) provides medical rehabilitation services, with its operations divided into the following business segments: Critical Illness Recovery Hospital, Rehabilitation Hospital, and Outpatient Rehabilitation.