Top 5 Undervalued Growth Stocks To Buy

The best stocks to buy now are not necessarily the stocks everyone is talking about. Growth stocks such as Nvidia are all the rage, but after running up massively, they’re not necessarily the best stocks to buy now. The best growth stocks to buy now, the future multibagger stocks, are those growth stocks that have missed out on the most recent rally and are still value stocks. The top growth stocks to buy now are also the best undervalued stocks to buy now. The best growth stocks to buy now are stocks that you probably haven’t heard of, or at the very least may have forgotten about. The top undervalued stocks to buy now haven’t been hit with FOMO yet. They’re not meme stocks or speculative stocks. The best stocks to invest in 2024 and the best stocks to buy right now are high growth stocks that have been forgotten about and left behind. But thanks to stock screens from places like Seeking Alpha, I was able to find the top 5 stocks to buy now, the top 5 growth stocks to buy, and the top 5 undervalued stocks to buy now.

When you think of the five best growth stocks to buy right now, which stocks come to mind? It’s probably the same five stocks that everybody is talking about. And everybody’s buying stocks like Nvidia, Apple, Alphabet, Amazon, and Microsoft. But with everybody buying the same five stocks, all of these stocks have become extremely expensive and overvalued. All five of these stocks have F ratings for valuations right now. Course members know why these stocks are running up. Market psychology has led to FOMO, or Fear Of Missing Out. And this means that people are buying these stocks because they think that they’re going to continue to go higher. Course members know that because of how stocks are priced, the more people who buy the stock, the higher the price goes, and it becomes a self-fulfilling prophecy.

But with over 8,000 stocks in the stock market, surely there are some high growth stocks that people have missed that are still undervalued. And in fact, there are. I found 5 high growth stocks that have missed out on the recent rally that are still extremely undervalued. So without further ado, here are the five best undervalued growth stocks to buy right now.

The first stock is NET. This is Cloudflare. And over the past couple of weeks, Cloudflare stock has been dropping. And this provides an incredible buying opportunity for dip buyers who are looking for a high growth stock that is undervalued. Cloudflare revenue growth has been impressive, with last year raking in $1.3 billion in revenue. That represents anywhere from a 30% to 50% annual growth rate on revenue. Cloudflare revenue growth is ranked an A, with an average 31% year-over-year revenue growth. Even more impressive is Cloudflare’s profitability, with a 76% gross profit margin. And even though analysts have expected Cloudflare to continue to grow, Cloudflare has actually grown faster than analysts have expected it to grow. Every year for the past five years, Cloudflare has beat analyst earnings expectations.

Now when it comes to valuation and trying to find a growth stock that’s undervalued, what we’re looking for is not valuations with a grade of A. Those are called value stocks. When it comes to growth stocks, we’re looking for C or better. Essentially what we want to avoid are the stocks that are extremely overbought – those top five growth stocks that everybody knows about and everybody’s buying. We want to avoid those because they’ve already run up; they’re already overvalued. We want to find the ones that have not yet run up, that have not yet become hype stocks or meme stocks or whatever you want to call them, where FOMO has not yet set in. We want to find the stocks that are still undervalued. And for that, we’re looking for valuation ratings of C or better.

Cloudflare is one of those companies with a valuation of C, a growth rating of A, a profitability rating of B, a momentum rating on the stock of a B-, and upward rated revisions to their earnings estimates of an A. Overall, it is clear to see why Seeking Alpha analysts have rated Cloudflare a buy. And even though Wall Street rates it a hold, quant analysts have rated it a strong buy.

In the course, I talk a lot about investing fundamentals and having the right mindset when it comes to investing, not getting caught up in the hype, and not buying the stocks that everybody else is buying just because, but instead going out, finding your own stocks that are undervalued, that have not yet run up. And the next stock on my list is one that a lot of people have never even heard about before.

And that stock is ZS, Zscaler. As you can see on the chart, this is another stock that has been severely beat down over the past couple of weeks and is now a great stock to buy. Zscaler is a cybersecurity company very similar to Palantir. Palantir is a company that a lot of people know about, and a stock that a lot of people are invested in. But it’s nothing compared to Zscaler. Palantir’s revenue growth was 21% year over year, but Zscaler’s revenue growth was 37% year over year. Zscaler has a solid A rating when it comes to growth, and Zscaler also gets an A on profitability with a massive 77% profit margin.

And like a lot of stocks on this list, Zscaler has grown much faster than analysts have expected. Zscaler has beat analyst earnings expectations for each of the past six years in a row. Zscaler’s revenue has grown between 40% – 60% per year every single year for the past six years. Their revenue was $1.6 billion last year, and this year will be well over $2 billion. ZS has a valuation of C, a growth rate of A, a profitability of A, and even though the stock momentum is only a C+ because of how beat down it is, that actually makes it a great time to buy. Their earnings revisions are an A+, and it is a no brainer why Seeking Alpha analysts rate this a buy, Wall Street rates it a buy, and quant analysts rate it a strong buy.

And this list just keeps getting better because the next stock that we’re going to talk about, not only is it a high growth stock and undervalued, it’s actually a value stock also. And that stock is APTV. This is Aptiv. And as you can see on the chart, this stock has been beat down for a years. Aptiv is a technology company that increases safety, fuel economy, and connected systems for electric vehicles as well as gas powered vehicles. Despite some macro headwinds from a slowdown in EV growth worldwide, this company has still seen increases in both revenue and earnings. Earnings per share were up a massive 27% in the first quarter, and they’ve increased their margin by a massive 24%.

Aptiv’s growth rate is a little bit slower than the other growth stocks on the list at 11% per year, but still very impressive compared to the sector average. Revenues are extremely impressive, coming in at over $20 billion last year. And while they had an obvious slowdown during the Covid pandemic, revenues have recovered nicely over the past three years. This growth stock actually has a valuation grade of A, making it not only a growth stock, but also a value stock. The forward PE ratio on APTV is only 12.44, making this undervalued by any metric. APTV is also the first stock on this list that is profitable, with an earnings per share of $10.60. That’s why, despite a momentum grade of C- due to how much the stock has been beaten down, the valuation is an A, the growth is an A, the profitability is an A, and the revisions are an A. This makes Seeking Alpha analysts give it a buy, as well as Wall Street giving it a buy, even though the quant analyst rating from a technical standpoint is a hold. Finding a stock like this that’s not only a high growth stock, but also extremely undervalued, is extremely hard to find, making APTV a very special stock. Fundamental analysis is one of the key factors that course members learn, and it’s how we find these undervalued stocks.

The next of the five best undervalued growth stocks to buy now is OKTA, Okta. Like the other stocks on this list, Okta has been beat down for the past couple of weeks, but is still showing some upward momentum on the annual charts. Okta is a technology company that allows companies to identify their customers and employees and improve their security. In addition to improving company security, they also allow their users to improve their experience with a single sign-on into all of the apps that an employee or customer might use at the company. Okta’s growth grade is an A+, with a 20% annual revenue growth, and a massive 215% annual EBITDA growth rate. Okta also receives an A for profitability with a 75% gross profit margin.

And like the other stocks on this list, Okta continuously beats analyst expectations. Okta has beat analysts expectations for each of the past seven years in a row, with 2021 having an almost 150% surprise over analyst expectations, and 2023 coming in almost as good with an 80% surprise beat. Okta has increased revenues almost 10X over the past six years, now pulling in well over $2 billion per year in revenue. Despite a slowdown in revenue growth last year, Okta has seen a 40% to 50% revenue growth for each of the past seven years. And while the fall in the stock’s price over the past few weeks gives it a momentum grade of a C+, it still comes in with a valuation grade of a C+, a growth grade of A+, profitability of A, and revisions of A, giving an overall Seeking Alpha analyst rating of a buy, a Wall Street rating of a buy, and a quant rating of a strong buy.

The last stock on the list is the only stock that has, in fact, participated in the massive rally over the past 18 months. And yet somehow this stock is still undervalued. That stock is RCL, Royal Caribbean Cruise Lines. The RCL stock price has been growing over the past couple of weeks, and yet the valuation is still impressive. RCL has a growth grade of an A, with a 38% annual growth rate, and a massive 100% EBITDA growth rate. And look at this compared to the sector average. RCL comes in with 1,600% better growth than the sector average, and an 18,000% better EBITDA growth than the sector average, with a massive 140,000% better EBIT growth than the sector average. RCL is absolutely killing it when it comes to growth, and that is why, even though the stock price has gone up, the stock price has not increased fast enough to keep up with RCL’s growth rate.

Even though RCL’s valuation is a C-, the forward PE ratio is only 13, which makes this really cheap. RCL’s profitability is an A, with a gross profit margin of 47%, which is very impressive for a cruise line. And despite a slowdown during the Covid pandemic, RCL has come back strong with one of their most profitable years ever. Excluding the 477% growth rate coming out of the Covid pandemic, RCL saw a 57% growth rate last year, which is very impressive. They are also profitable, with an annual earnings per share of $7.64. And despite earnings getting beat up during the Covid pandemic, they have beat earnings expectations for each of the past two years. Looking at earnings beats by quarter, RCL has beat analyst expectations for each of the past four quarters in a row. Thanks to RLC’s rise in their stock price, RCL is the only stock in the list to get an A on momentum. They have a C on valuation, an A on growth, an A on profitability, and an A+ on revisions. It’s a no brainer that RCL gets a buy rating from Seeking Alpha analysts, a buy rating from Wall Street, and a strong buy from quant analysts.

It’s easy to see why these are the 5 best undervalued growth stocks to buy now. And growth stocks are just one of the many investing strategies that course members learn about. And with Independence Day coming up here in the United States, I want to celebrate your financial independence by giving you $40 off the course. All you have to do is enter promo code JULY4 at checkout to get $40 off the course and celebrate your financial independence.

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