In this article, we will look at the 9 Most Profitable Undervalued Stocks to Buy Now.
Some profitable stocks are getting treated like bargains in a market that is more willing to reward revenue growth, narrative, or momentum than old-fashioned earnings power. But that imbalance makes the current setup interesting. J.P. Morgan Asset Management notes that investors had been prioritizing “growth expectations” over “profitability and financial risk measures,” a backdrop that helps explain why some solid businesses can still look overlooked even when they keep generating real earnings and cash flow.
That is also where the institutional case becomes more compelling. Franklin Templeton argues that value is about finding “misalignments between price and longer-term potential,” not just screening for low multiples, and its “Undervalued quality” framework focuses on companies whose “resilience of cash flows” is not fully reflected in the share price. J.P. Morgan makes a similar point from a factor lens, saying “High quality stocks are now priced at a discount.” Fidelity brings the idea back to portfolio construction, highlighting “best-in-class companies” and the chance to buy them at “temporarily marked-down prices.” Taken together, the message is that cheapness matters more when it comes attached to profitability, cash-flow durability, and business quality.
Against this backdrop, the most profitable undervalued stocks start to stand out. That brings us to the 9 Most Profitable Undervalued Stocks to Buy Now.
Our Methodology
We used the Finviz screener to identify stocks that are trading below a forward P/E of 15 and have a return on equity (ROE) of at least 15%. We then 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.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
9. The Hartford Insurance Group, Inc. (NYSE:HIG)
On April 13, 2026, BofA raised its price target on The Hartford Insurance Group, Inc. (NYSE:HIG) to $138 from $136 previously and maintained a Neutral rating on the shares, reflecting updates to peer multiples and the impact of Q4 developments across its U.S. insurance coverage.
On the same day, The Hartford Insurance Group, Inc. and the University of Connecticut announced the early stages of a collaboration focused on energy innovation, business resiliency, and extreme heat research. The partnership includes a philanthropic investment in the Korey Stringer Institute, aimed at advancing worker safety insights related to heat exposure, as well as a fellowship program with UConn’s Institute of the Environment and Energy centered on energy innovation.
On April 8, 2026, The Hartford Insurance Group, Inc. appointed Natalie Burns as head of Enterprise Sales & Distribution, effective May 1, reporting to Tracey Ant, head of Middle & Large Business. In this role, Burns will focus on strengthening relationships with key distribution partners and coordinating across Personal and Business Insurance and Employee Benefits sales teams to support growth. She succeeds Stephen Screen, who recently transitioned to lead Alternative Placement Solutions within the company’s Global Specialty unit.
The Hartford Insurance Group, Inc. provides insurance and financial services across multiple markets.
8. Rogers Communications Inc. (NYSE:RCI)
On April 15, 2026, Rogers Communications Inc. (NYSE:RCI) announced that customers can now stay connected in areas without traditional cellular coverage while roaming in the U.S., enabled by the combined reach of Rogers Satellite and T-Satellite, expanding coverage across both Canada and the U.S.
On April 6, 2026, Canaccord lowered its price target on Rogers Communications to C$55.50 from C$57 and maintained a Buy rating. Similarly, JPMorgan reduced its price target to C$63 from C$65 while keeping an Overweight rating ahead of Q1 results. The firm also lowered its estimate for Q1 mobile phone net additions to 5,000, citing higher churn driven by increased competitive intensity and slower market growth during the quarter.
Last month, Rogers launched its Screen Break Unplug and Play events as part of a broader national initiative aimed at addressing excessive screen time among youth. The program, introduced on the Global Day of Unplugging, encourages teens and pre-teens to engage in offline activities, with initial events including skating experiences in NHL arenas.
Rogers Communications Inc. provides communications, media, and entertainment services in Canada.
7. Alcoa Corporation (NYSE:AA)
On April 16, 2026, Alcoa Corporation (NYSE:AA) reported Q1 adjusted EPS of $1.40, below the $1.51 consensus estimate, on revenue of $3.19B versus $3.27B expected. Alumina production declined 5% sequentially to 2.4 million metric tons, primarily due to seasonal maintenance at Australian refineries, while aluminum production was flat at 607,000 metric tons as progress on the San Ciprian smelter restart offset fewer operating days. In the Alumina segment, third-party shipments fell 31% sequentially due to lower externally sourced sales, seasonal weakness, and shipment delays in Australia tied to the Middle East conflict and Cyclone Narelle. Aluminum shipments declined 8%, reflecting inventory repositioning in North America and reduced trading activity, partially offset by increased volumes from the San Ciprian restart.
For Q2 2026, Alcoa expects mixed segment impacts. In Alumina, adjusted EBITDA is projected to decline by about $15M sequentially due to lower prices and volumes from bauxite offtake agreements and higher diesel costs linked to the Middle East conflict. In Aluminum, adjusted EBITDA is expected to increase by roughly $55M, driven by improved shipments, higher product premiums, lower production costs following the smelter restart, and benefits from prior inventory repositioning, partly offset by seasonally lower third-party energy sales. The company also expects Section 232 tariff costs on U.S. aluminum imports from Canada to rise by about $35M sequentially, while alumina input costs in the Aluminum segment should improve by approximately $20M. Based on current market conditions, Alcoa anticipates Q2 operational tax expense of $110M to $120M.
Following the results, BMO Capital maintained a Market Perform rating and $75 price target, describing the Q1 miss as “explainable.” The firm noted no changes to 2026 shipment targets and pointed to rising aluminum prices and regional premiums as key drivers for a potential rebound in Q2 earnings. While some raw material costs are increasing, BMO said Alcoa’s exposure to spot energy remains limited. The firm added that although a prolonged Middle East conflict could weigh on demand, ongoing asset sales and improving free cash flow could enhance capital allocation flexibility.
Alcoa Corporation operates across the aluminum value chain, including bauxite mining, alumina refining, and aluminum production globally.
6. LATAM Airlines Group S.A. (NYSE:LTM)
On April 12, 2026, Goldman Sachs upgraded LATAM Airlines Group S.A. (NYSE:LTM) to Buy from Neutral with a price target of $63.40, down slightly from $64.10, after initiating coverage. The firm pointed to the company’s solid financial position and higher-income customer mix in Latin America, which it believes should help cushion the impact of ongoing macro volatility. Goldman also expects LATAM to pass through higher fuel costs via ticket pricing, with less demand impact compared to peers.
On March 25, 2026, Morgan Stanley analyst Jens Spiess upgraded LATAM to Overweight from Equal Weight with a price target of $60, trimmed from $61. The firm sees about 22% upside following recent share underperformance tied to rising fuel prices, noting the company’s “top-tier profitability,” manageable leverage, and partial fuel hedging as key strengths in navigating oil price volatility.
Similarly, Citi upgraded LATAM to Buy from Neutral with a price target of $58, up from $53. The firm believes the initial shock from higher oil prices is already reflected in Latin American airline stocks and said carriers are better positioned than in 2022 to absorb cost pressures. Citi views LATAM as among the least exposed in the region, supported by its recovery trajectory and relative resilience to fuel-driven headwinds.
LATAM Airlines Group S.A. provides passenger and cargo air transportation services across Latin America and international markets.
5. GoDaddy Inc. (NYSE:GDDY)
On April 15, 2026, LegalZoom (LZ) and GoDaddy Inc. (NYSE:GDDY) announced a strategic partnership that makes LegalZoom the exclusive legal services provider within GoDaddy’s ecosystem. The collaboration allows customers to access LegalZoom’s business formation services directly through the GoDaddy platform, enabling users to secure a domain, build a website, and launch a business with integrated legal and compliance support. The offering includes guided formation tools, expedited LLC filing, and optional attorney assistance.
On April 6, 2026, Cloudflare (NET) and GoDaddy announced another strategic partnership focused on giving website owners and AI developers greater transparency and control over how content is accessed by AI systems. As part of the integration, GoDaddy will incorporate Cloudflare’s AI Crawl Control into its hosting platform, allowing users to manage which AI crawlers can access their content while enhancing site protection. The initiative also aims to support broader standards for identifying AI agents and improving trust across the open web.
Last month, Piper Sandler assumed coverage of GoDaddy with a Neutral rating and a $93 price target, citing a balanced valuation. The firm pointed to marketing maturity and competitive pressures, noting limited near-term catalysts to reverse declining domain share trends based on its channel checks.
GoDaddy Inc. develops cloud-based platforms and tools for small businesses and individuals.
4. Adobe Inc. (NASDAQ:ADBE)
On April 16, 2026, RBC Capital lowered its price target on Adobe Inc. (NASDAQ:ADBE) to $350 from $400 due to multiple compressions across peers but maintained an Outperform rating ahead of the Adobe Summit. The firm expects management to emphasize the strength of Adobe’s ecosystem, while noting that investors are still looking for a re-acceleration in annual recurring revenue. RBC added that return on investment remains central to the company’s generative AI value proposition and is likely to be a key theme at the event.
On April 14, 2026, Adobe introduced Firefly AI Assistant, a new interface designed to unify its creative tools. The assistant allows users to describe desired outcomes in natural language and then executes multi-step workflows across Creative Cloud applications such as Firefly, Photoshop, Premiere, Lightroom, Express, and Illustrator.
On April 12, 2026, BTIG analyst Nick Altmann initiated coverage of Adobe with a Neutral rating and no price target, citing uncertainty around how AI will reshape the creative ecosystem. The firm said these questions are creating concerns about Adobe’s long-term revenue and margin trajectory, and it is waiting for clearer visibility before turning more constructive.
Adobe Inc. provides software and services for digital content creation and marketing.
3. PayPal Holdings, Inc. (NASDAQ:PYPL)
On April 15, 2026, Mizuho downgraded PayPal Holdings, Inc. (NASDAQ:PYPL) to Neutral from Outperform and lowered its price target to $50 from $60, citing increasing competitive and fundamental headwinds. The firm said PayPal and Venmo face direct substitution risk from X, particularly in peer-to-peer payments and digital wallet entry points, while also flagging longer-term pressure on PayPal’s branded checkout business as social commerce expands.
On April 8, 2026, PayPal Holdings, Inc. announced that its Payment Links feature is now integrated directly into Canva, allowing the platform’s 265 million monthly users to convert designs into checkout experiences. The integration enables creators and small businesses to accept payments through PayPal’s platform while offering customers a range of payment options.
On April 7, 2026, Citi raised its price target on PayPal Holdings, Inc. to $48 from $42 and maintained a Neutral rating on the shares following meetings with management. The firm said PayPal is focused on stabilizing its branded checkout segment, with volumes appearing to have stabilized in Q1 and potentially re-accelerating toward 2% growth.
PayPal Holdings, Inc. provides digital payment solutions for consumers and merchants globally.
2. StoneCo Ltd. (NASDAQ:STNE)
On April 14, 2026, JPMorgan analyst Guilherme Grespan lowered the price target on StoneCo Ltd. (NASDAQ:STNE) to $20 from $21 and maintained an Overweight rating on the shares, reflecting updates to the firm’s model.
On the same day, StoneCo Ltd.’s board has approved an extraordinary dividend of $2.53 per share, payable on May 4, 2026, to shareholders of record as of April 24.
Last month, StoneCo Ltd. reported Q4 adjusted EPS of 51c, ahead of the 48c consensus estimate, while revenue of $690.09M came in below expectations of $717.93M. In its shareholder letter, management described 2025 as a year focused on “deliberate simplification,” emphasizing efforts to reduce operational complexity and improve long-term efficiency. The company also noted that the sale of Linx was driven not by performance concerns, but by a strategic decision that the business no longer aligned with its core focus.
StoneCo Ltd. provides financial technology and software solutions for merchants across Brazil.
1. PDD Holdings Inc. (NASDAQ:PDD)
On April 16, 2026, Arete upgraded PDD Holdings Inc. (NASDAQ:PDD) to Buy from Neutral and raised its price target to $121 from $118, citing an improving earnings outlook. The firm said it expects PDD to continue gaining market share both in China and internationally over the long term.
On the same day, Morgan Stanley’s Eddy Wang placed PDD on Research Tactical Idea, reflecting a view that the stock could rise over the next 15 days. The call follows penalties imposed by China’s State Administration for Market Regulation on several e-commerce platforms, including PDD, tied to “Ghost Takeaway” cases. Morgan Stanley said the outcome removes a regulatory overhang that had been in place since late 2025, and believes the development could be seen as incrementally positive for the stock. The firm maintains an Overweight rating and a $148 price target.
Last month, PDD reported Q4 non-GAAP EPS of RMB17.69, down from RMB20.15 a year earlier, on revenue of RMB123.91B, up from RMB110.61B. Management highlighted its continued focus on high-quality growth and signaled increased investment in supply chain capabilities as a key priority heading into the next phase of expansion.
PDD Holdings Inc. operates e-commerce platforms including Temu, offering a wide range of consumer products globally.
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