In this article, we explore the 9 Most Undervalued Growth Stocks to Buy According to Analysts.
Geopolitical tensions, coupled with fears of disruptions from artificial intelligence, continue to impact the US stock market. The S&P 500 Index, the tech-heavy Nasdaq 100, and the so-called old-economy names of the Dow Jones Industrial Average are in the red for the first time in a long time. The selloff comes amid concerns that the conflict in the Middle East could reignite inflation, driven by higher energy prices and disruptions to global commerce.
Consequently, Wall Street strategists at Bank of America, Goldman Sachs, and Barclays are advising investors to lean more into quality, high-cash-flow companies that can navigate the current turmoil. Similarly, there are increased calls to focus on growth companies with strong balance sheets and the ability to keep spending while avoiding credit-sensitive corners of the market.
“With the US economy still robust, we expect pullbacks to present attractive entry points,” said Christian Raute, head of markets trading strategy at Citigroup. “These factors may prove net inflationary for Europe and parts of Asia, weighing on domestic consumption, production, and central bank policy. That said, if conditions stabilize, this could present a compelling entry opportunity.”
According to Morgan Stanley and Piper Sandler strategists, any pullback related to the Iran war would be a dip buying opportunity. That’s in part because the pullback would be a correction from record-high valuations. After two years of blockbuster gains, most counters were trading above historical norms.
The bullish views are based on the premise that a solid corporate America profit engine will support a bounce-back following a pullback. Similarly, market pullbacks are presenting some of the best entry points for undervalued growth stocks.
Undervalued growth companies remain well-positioned to benefit from megatrends, owing to their strong balance sheets and scale that enable operations to weather any disruptions. With that in mind, let’s take a look at some of the most undervalued growth stocks to buy according to analysts.
Photo by Christopher Gower on Unsplash
Our Methodology
To compile a list of the most undervalued growth stocks to buy according to analysts, we analyzed growth ETFs and used the Finviz screener. We settled on companies that have grown sales and earnings by over 20% over the past five years. We then trimmed the list by focusing on stocks trading at a P/E of less than 20 and with an upside potential of more than 20% as of March 26. We also detailed the number of high-profile hedge funds holding stakes in them in the fourth quarter of 2025. Finally, we ranked the stocks in ascending order based on their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Most Undervalued Growth Stocks to Buy According to Analysts
9. DLocal Limited (NASDAQ:DLO)
Stock Upside Potential: 27.71%
Forward P/E: 13.53
Number of Hedge Fund Holders: 28
DLocal Limited (NASDAQ:DLO) is one of the most undervalued growth stocks to buy according to analysts. On March 18, Truist Securities reiterated a Buy rating on DLocal Limited (NASDAQ:DLO) with a $15 price target.
The positive stance is in response to the company delivering impressive fourth-quarter and full-year 2025 results that asserted exceptional execution as a world-leading financial infrastructure platform for emerging markets.
The company’s total payment volume rose 70% in the fourth quarter to $13.1 billion and 60% for the full year to $40.82 billion. Consequently, revenue was up 65% year over year to $337.9 million, and net income rose 87% to $55.5 million, or 0.18 per share. Full-year revenue was up 47% to $1.09 billion, as net income rose 63% to $196.9 million.
Following the impressive financial results, the board of directors has approved a cash dividend of $57.2 million, translating to $0.19 per share. The dividend is to be paid to shareholders of record as of May 27, 2026, on June 10, 2026.
DLocal Limited (NASDAQ:DLO) is a financial technology company that provides a cross-border payment processing platform, allowing global merchants to accept payments and make payouts in emerging markets. Using one API and contract, it connects businesses with over 900 local payment methods across 40+ countries in Latin America, Asia, and Africa.
8. Axos Financial, Inc. (NYSE:AX)
Stock Upside Potential: 32.30%
Forward P/E: 9.55
Number of Hedge Fund Holders: 22
Axos Financial (NYSE:AX) is one of the most undervalued growth stocks to buy, according to analysts. On March 9, DA Davidson reiterated a Buy rating on Axos Financial (NYSE:AX) with a $112 price target, impressed by its prospects as an internet-based bank.
The research firm has touted the company’s prospects as a digital bank backed by a mix of commercial lending segments, mass-market, and specialty deposit verticals. The branchless structure strengthens the company’s edge in driving nimbleness and profitability.
Therefore, Axos Financial enjoys a cost advantage over other institutions, enabling it to offer higher deposit rates to its customers. In addition, it has successfully developed a streamlined procedure within its operating structure, as it also develops a digital platform to enhance integration across all business lines.
The unique business model was the catalyst behind Axos Financial delivering impressive second-quarter fiscal 2026 results, with earnings per share totaling $2.25 against $2.07 expected and revenues totaling $385.1 million, compared to $347.25 million expected.
Axos Financial, Inc. (NYSE:AX) is a technology-driven financial services holding company that operates a digital-first, branchless banking model (Axos Bank) along with securities clearing and investment advisory services. It provides high-yield checking/savings accounts, commercial banking, mortgages, and automated investing to individuals and businesses nationwide, without physical branches.
7. Amentum Holdings Inc. (NYSE:AMTM)
Stock Upside Potential: 38.90%
Forward P/E: 11.16
Number of Hedge Fund Holders: 35
Amentum Holdings Inc. (NYSE:AMTM)is one of the most undervalued growth stocks to buy, according to analysts. On March 12, Truist Securities reiterated a Buy rating on Amentum Holdings Inc. (NYSE:AMTM) with a $42 price target.
The research firm remains confident in the company’s prospects, owing to its long-term growth trajectory supported by core business operations. The company boasts a $4 billion growth portfolio that represents 30% of total revenues.
While the company’s growth portfolio entails three key segments of new nuclear, critical digital infrastructure, and space systems and technology, the research firm insists they are well insulated from artificial intelligence risks. Similarly, the research firm believes investors should look past potential near-term risks, including private equity overhang and the Iran conflict.
Earlier on March 10, Amentum secured a $112 million contract for nuclear decommissioning and waste management services at research sites across four European countries. The contract is in response to the company’s track record of delivering European-funded projects on time and on budget.
Amentum Holdings Inc. (NYSE:AMTM) is a global provider of advanced engineering, technology, and project management solutions, primarily serving U.S. and allied government agencies. They operate through two main segments, Digital Solutions (cybersecurity, AI, IT) and Global Engineering Solutions (nuclear, environmental, defense), operating in 80+ countries.
6. Apollo Global Management Inc. (NYSE:APO)
Stock Upside Potential: 39.25%
Forward P/E: 12.18
Number of Hedge Fund Holders: 74
Apollo Global Management (NYSE:APO) is one of the most undervalued growth stocks to buy, according to analysts. On March 24, Apollo Global Management (NYSE:APO) entered into an agreement to acquire Nippon Sheet Glass for about $3.7 billion in enterprise value.
It becomes the asset manager’s fifth private equity investment in Japan. The transaction is to be completed early next year, subject to shareholder approval. Nippon Sheet has already announced plans to issue new shares worth $1.04 billion to an Apollo entity as part of the deal.
The US asset manager plans to invest equity to support the Japanese company’s financial position. The company’s debt had ballooned to more than 570 billion yen, and the burden of interest payments has become a problem. In addition, Nippon Sheet’s principal lenders are expected to swap a portion of their outstanding loans for equity to shore up Nippon Sheet’s balance sheet.
The acquisition comes amid growing expectations that Nippon Sheet is well-positioned to capitalize on rising demand for architectural glass, automotive glazing, and solar products.
Apollo Global Management Inc. (NYSE:APO) is a leading global alternative asset manager that specializes in credit, private equity, and real estate investments, managing over $600 billion in assets. It provides capital solutions to businesses, operates extensively in retirement services, and aims to generate income-oriented returns across market cycles for its investors.
While we acknowledge the potential of APO 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 APO and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Most Undervalued Growth Stocks to Buy According to Analysts.
Disclosure: None. Follow Insider Monkey on Google News.
