In this article, we will discuss the 7 Best Undervalued Stocks to Buy Now.
According to Fidelity, the broader stock market may have established upper and lower bounds for the year, resulting in a trading range for the remainder of 2025. While analysts continue to expect positive earnings growth for 2025, this may be mitigated by downward pressure on stock valuations resulting from broader interest-rate dynamics. The firm believes that international stocks have been outperforming so far this year, suggesting that diversification remains important in tough market environments.
Broadening to Continue, Says T. Rowe Price
T. Rowe Price, a global investment management firm, believes that the Trump administration’s trade policies can result in a supply shock to the US and a demand shock for the rest of the world. As per the firm, there will be a broadening of the opportunity in equities, both in the US and from the US towards other regions. The emergence of start-ups, like China’s DeepSeek, showcases that AI innovation is no longer concentrated in a limited trillion-dollar companies.
As per the firm, in the US, the earnings growth spread between large tech stocks and other sectors continues to narrow, while value sectors can become more competitive. Outside the US, India and Argentina have been standing out when it comes to emerging markets, with European equities remaining attractively valued.
Amidst these trends, let us now have a look at the 7 Best Undervalued Stocks to Buy Now.
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Our Methodology
To list the 7 Best Undervalued Stocks to Buy Now, we used a screener to shortlist the stocks that trade at a forward P/E of less than ~15x. Next, we chose the ones popular among hedge funds, as of Q1 2025. Finally, the stocks are ranked in ascending order of their hedge fund sentiments, as of Q1 2025.
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).
7 Best Undervalued Stocks to Buy Now
7. TechTarget, Inc. (NASDAQ:TTGT)
Number of Hedge Fund Holders: 8
Forward P/E as on June 10: ~12.1x
TechTarget, Inc. (NASDAQ:TTGT) is one of the 7 best undervalued stocks to buy now. On June 10, JPMorgan analysts downgraded the company’s stock from “Neutral” to “Underweight,” reducing the price objective from $18.00 to $8.00. The downgrade comes after the company released its financial results for FY 2024. The company’s reported results for 2024 demonstrate the structure of a combination, comprising 12 months’ contribution from the Informa Tech digital businesses and ~1 month’s contribution from the legacy TechTarget business, being the period from completion of the transaction (December 2, 2024) to the end of the year.
On this basis, its reported revenues came in at $285 million, with a GAAP net loss of $117 million. The net loss reflects the small contribution period of TechTarget, acquisition and integration costs, and non-cash impairments. Furthermore, TechTarget, Inc. (NASDAQ:TTGT) stated that the market backdrop remains uncertain in H1 2025, and it expects a low-to-mid-single-digit YoY decline in revenues throughout the H1 2025 period, with sequential improvement from Q1 to Q2.
Overall, JPMorgan’s analysis demonstrates that the recent clarity on TechTarget, Inc. (NASDAQ:TTGT)’s combined performance and near-term prospects resulted in a less favorable view of its investment appeal. TechTarget, Inc. (NASDAQ:TTGT) stated that it targets the growth trajectory to improve further through H2 2025, as its expanded customer and go-to-market strategy continues to gain momentum, providing broadly consistent YoY revenue performance.
6. ArcBest Corporation (NASDAQ:ARCB)
Number of Hedge Fund Holders: 23
Forward P/E as on June 10: ~14.5x
ArcBest Corporation (NASDAQ:ARCB) is one of the 7 best undervalued stocks to buy now. On June 10, BofA upped ArcBest Corporation (NASDAQ:ARCB)’s stock to “Neutral” from “Underperform,” increasing the price objective to $74 from the previous target of $63, as reported by The Fly. The adjustment comes after a discussion with the company’s CFO, Matt Beasley. The conversation shed light on the company’s ongoing progress and its capability to offset pressure on core yields while, at the same time, continuing to gain momentum with the core customers.
The firm’s analysts highlighted the strides ArcBest Corporation (NASDAQ:ARCB) has been making in its core Less-Than-Truckload (LTL) operations. The company stated that, in Q1 2025, continued productivity gains were aided by technology, training, and network design. In the Asset-Based segment, productivity improvements of 1.1% and other cost initiatives supported in mitigating the impact of the soft market environment, increased insurance and healthcare costs, as well as annual labor cost increases related to ABF’s union contract.
The Asset-Light segment was supported by improvement in margins, reduced operating costs, and productivity improvements, with shipments per employee per day improving 23.6% YoY in Q1 2025.
5. Eagle Bancorp, Inc. (NASDAQ:EGBN)
Number of Hedge Fund Holders: 28
Forward P/E as on June 10: ~12.8x
Eagle Bancorp, Inc. (NASDAQ:EGBN) is one of the 7 best undervalued stocks to buy now. Janney Montgomery Scott, a leading financial services firm, upgraded the company’s stock to “Buy” from “Neutral” with a fair value estimate of $24, as reported by The Fly. According to the analyst, market players have largely ignored the company’s shares over the past few months. The analyst believes that investors are required to carefully assess Eagle Bancorp, Inc. (NASDAQ:EGBN)’s story as it still trades at a less than 66% average price-to-tangible book value ratio since December 2022. If market players continue to be patient, the stock’s valuation might return to its average historical level, rewarding the investors.
Total loans came in at $7.9 billion as of March 31, 2025, reflecting a rise of 0.1% from the prior quarter-end. The rise in total loans was because of an increase in owner-occupied commercial real estate loans from the prior quarter-end. This was offset by a decline in income-producing commercial real estate loans. Furthermore, Eagle Bancorp, Inc. (NASDAQ:EGBN)’s capital position is strong, with common equity tier one capital at 14.6% and a tangible common equity ratio surpassing 10%.
Eagle Bancorp, Inc. (NASDAQ:EGBN) operates as the bank holding company for EagleBank, which offers commercial and consumer banking services.
4. Methanex Corporation (NASDAQ:MEOH)
Number of Hedge Fund Holders: 28
Forward P/E as on June 10: ~12.6x
Methanex Corporation (NASDAQ:MEOH) is one of the 7 best undervalued stocks to buy now. On June 10, JPMorgan began coverage on the company’s stock with a “Neutral” rating and a price objective of $33.00. The company happens to be a leading global producer and distributor of methanol, which is a critical chemical component utilised in construction materials, plastics, and fuels.
The firm’s analysts believe that Methanex Corporation (NASDAQ:MEOH)’s financial leverage is expected to increase as a result of prospective acquisitions of methanol and ammonia assets from OCI in the US and Europe. Furthermore, the firm opines that the broader industrial landscape remains sluggish, with no significant expected upswings in methanol demand volume. Also, over the near term, there can be some softening of prices.
At the beginning of Q2 2025, Methanex Corporation (NASDAQ:MEOH) has seen moderation in methanol pricing with higher supply from the restart of numerous large-scale methanol plants and a decline in global energy pricing amidst higher uncertainty and concerns related to tariffs and their effect on global activity. Methanex Corporation (NASDAQ:MEOH) expects to complete the acquisition of OCI Global’s international methanol business in Q2 2025 and to draw on the $650 million term loan A, which will be available on closing.
Methanex Corporation (NASDAQ:MEOH) is a Vancouver-based, publicly traded company that is the world’s largest producer and supplier of methanol.
3. Atlantic Union Bankshares Corporation (NYSE:AUB)
Number of Hedge Fund Holders: 29
Forward P/E as on June 10: ~10.06x
Atlantic Union Bankshares Corporation (NYSE:AUB) is one of the 7 best undervalued stocks to buy now. On June 10, Raymond James upped the company’s stock from “Outperform” to “Strong Buy,” increasing the price objective to $41 from the prior target of $37, as reported by The Fly. The firm’s analysts believe that the stock’s underperformance was mainly due to worries that the Department of Government Efficiency (DOGE) could negatively impact the D.C. economy and the company’s acquisition of Sandy Spring in the D.C. suburbs.
However, the discussions with Atlantic Union Bankshares Corporation (NYSE:AUB)’s management gave a more positive outlook. Its leadership reaffirmed the 2025 guidance and mentioned numerous optimistic indicators. These include a growing loan pipeline, expansion of core net interest margin (NIM), healthy asset quality, and a strong capital position, which can result in share repurchases. Overall, the analysts cited Atlantic Union Bankshares Corporation (NYSE:AUB)’s attractive valuation and expected improvement in its financial performance over the next 12 months as factors for an upgraded rating and increased price target.
For FY 2025, Atlantic Union Bankshares Corporation (NYSE:AUB) expects net interest income (FTE) of ~$1.15 billion – $1.25 billion and NIM (FTE) of ~3.75% – 4.00%. Furthermore, it expects adjusted operating non-interest income of between ~$165 million – $185 million.
Atlantic Union Bankshares Corporation (NYSE:AUB) is a financial holding company and a bank holding company.
2. Amentum Holdings, Inc. (NYSE:AMTM)
Number of Hedge Fund Holders: 37
Forward P/E as on June 10: ~9.8x
Amentum Holdings, Inc. (NYSE:AMTM) is one of the 7 best undervalued stocks to buy now. BofA analyst Mariana Perez Mora began coverage of the company’s stock with a “Neutral” rating and price objective of $24, as reported by The Fly.
As per the analyst, Amentum Holdings, Inc. (NYSE:AMTM) happens to be a top 10 provider of advanced engineering, technology solutions, and facility operations to US and international governments. Furthermore, it possesses more than $45 billion in backlog, which is aided by diversified customers, contracts, and capabilities. That being said, the elevated leverage and a subdued award environment tend to limit the growth opportunities, added the analyst. BofA expects that budget pressure and reprioritization of NASA missions can be a critical risk, considering that Space makes up for ~10% of Amentum Holdings, Inc. (NYSE:AMTM)’s revenues.
Amentum Holdings, Inc. (NYSE:AMTM) posted solid Q2 2025 results, demonstrating the strength of its mission-focused portfolio and the consistency of demand throughout markets. Its revenues came in at $3.5 billion, implying 1% growth on a pro forma basis. For FY 2025, Amentum Holdings, Inc. (NYSE:AMTM) expects revenues of between $13,850 million – $14,150 million, and adjusted EBITDA of $1,065 million – $1,095 million.
Amentum Holdings, Inc. (NYSE:AMTM) offers engineering and technology solutions.
Voss Capital, LLC, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Amentum Holdings, Inc. (NYSE:AMTM) is a newly formed, under-covered government services leader trading at an unwarranted 30%+ discount to trading peers due to spin-off dynamics and near-term selling pressure. With a $45 billion backlog (3.2x annual revenue), strong cash generation and a clear deleveraging path, AMTM offers a compelling re-rate opportunity as it executes its post-merger growth strategy.
AMTM was formed via a reverse Morris trust (RMT) merger between Amentum and Jacobs’ (ticker J) CMS division in Q3 2024, creating the second largest public government services provider by revenue. The company operates across five key markets: Defense (46%), Civil (17%), Environmental (15%), Space (11%), and Intelligence (11%), with growing demand across each segment driven by increasing geopolitical tensions, cybersecurity needs, space exploration, and government modernization initiatives. No single contract accounts for more than 4% of total revenue and AMTM’s scale provides a competitive advantage in bidding for larger contracts. About 65% of total revenues are earned through cost-plus contracts, which protects them in a high inflation environment, which would be our base case as Trump aims to reverse a decades long trend of globalization…” (Click here to read the full text)
1. Arch Capital Group Ltd. (NASDAQ:ACGL)
Number of Hedge Fund Holders: 46
Forward P/E as on June 10: ~11.9x
Arch Capital Group Ltd. (NASDAQ:ACGL) is one of the 7 best undervalued stocks to buy now. On June 10, Jefferies analyst Andrew Andersen downgraded Arch Capital Group Ltd. (NASDAQ:ACGL)’s stock from “Buy” to “Hold,” reducing the price target to $100 from the previous target of $106. The analyst pointed to expected challenges in the property catastrophe insurance segment. Despite the attractive pricing, the analyst opines that anticipations of mid-year softening can curb growth and potentially impact the returns.
Furthermore, the analyst believes that higher competition in the P-CAT and Specialty lines can weigh on the growth estimates. That being said, the primary Casualty segment can offer some support to Arch Capital Group Ltd. (NASDAQ:ACGL)’s revenue. As per the analyst, Arch Capital Group Ltd. (NASDAQ:ACGL) is expected to adopt a more cautious approach to growth in H2 2025 and into 2026. The company might become selective amidst the evolving market dynamics.
Gross premiums written by the insurance segment in Q1 2025 increased 24.4% YoY (4.8% excluding the MCE Acquisition), while net premiums written were 25.4% higher as compared to Q1 2024 (1.2% excluding the MCE Acquisition). The growth in net premiums written, excluding the impact of the MCE acquisition, demonstrated a rise in commercial automobile and other liability.
Arch Capital Group Ltd. (NASDAQ:ACGL) is engaged in providing insurance, reinsurance, and mortgage insurance products. Baron Funds, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Shares of specialty insurer Arch Capital Group Ltd. (NASDAQ:ACGL) rebounded from weakness in the prior quarter due to favorable operating trends and the relative stability of insurance stocks in a risk-off market. In the most recent quarter, the company reported better-than-expected earnings, and returns on equity remained strong in the high teens despite elevated catastrophe losses from Hurricane Milton. Management targets a 15% return on equity over a full cycle and expects to exceed the target in 2025 given firm market conditions. We continue to own the stock due to Arch’s strong management team and our expectation of significant growth in earnings and book value.”
While we acknowledge the potential of ACGL 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 ACGL and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
