Here Are 5 Undervalued Stocks to Buy Now!

When a stock gets kicked in the teeth while the business keeps growing, investors have to ask the uncomfortable question: bargain, or value trap with a fresh coat of paint? Daniel Pronk, a YouTuber with more than 270,000 subscribers, says five names may be getting unfairly overlooked after recent earnings: Sea Limited, Nu Holdings, S&P Global, Constellation Software, and Construction Partners.

• Five names stand out: Sea Limited, Nu Holdings, S&P Global, Constellation Software, and Construction Partners.
• The thesis: strong revenue growth, rising profits, and market share gains have been ignored as valuations compressed.
• The backdrop: Middle East tensions, higher Treasury yields, oil swings, AI hype, and sector rotation are still steering stock prices.

The basic argument is simple. The market has spent the last stretch punishing a lot of quality growth stocks, but a lower share price does not automatically mean a worse business. In several cases here, the fundamentals still look healthy: revenue is growing, free cash flow is expanding, and competitive positions are improving. That does not make these names risk-free. It just means the crowd may have gotten a little too eager to sell first and ask questions later.

Sea Limited: a bruised growth stock that still prints results

Sea Limited is one of the clearest examples of a high-growth company that has gone from market darling to market punching bag. The stock is down roughly 53% from its highs, yet the underlying business continues to put up serious numbers. In Q1, revenue reached $7.1 billion, with Shopee revenue rising 45% year over year, SeaMoney revenue jumping 71%, and Garena revenue increasing 20%.

That mix matters. Shopee is Sea’s e-commerce platform, SeaMoney is its digital financial services arm, and Garena is its gaming business. Together, they give Sea exposure to online shopping, payments, and entertainment across Southeast Asia and Brazil. For investors who like businesses with multiple growth engines, that is a decent setup. For investors who dislike chaos, it probably looks like three moving parts on a unicycle.

Sea also posted operating income of $593 million and net income of $438 million. Despite that, the stock still trades at about 21 times forward earnings. Forward earnings refers to what investors expect the company to earn over the next year, so the market is still assigning Sea a growth premium. It is not cheap in the bargain-bin sense, but it is a lot less expensive than when hype was doing the valuation heavy lifting.

Here is the bull case: the company keeps growing across Southeast Asia and Brazil, and the market appears to be discounting the durability of that growth. The risk case is just as real, though. E-commerce is competitive, fintech can get messy fast, and gaming has its own cycles. Sea may be executing well now, but growth stocks can fall out of favor for long stretches even when the numbers are solid. That is the annoying little tax of being a former market favorite.

“SeaMoney revenue jumped 71%.”

“the SE price remains down roughly 53% from previous highs.”

Nu Holdings: digital banking with plenty of runway left

If Sea is the bruised growth stock still fighting back, Nu Holdings is the fast-scaling fintech that may have far more room to run. The parent company of Nubank just crossed a major milestone: quarterly revenue topped $5 billion for the first time. Net income rose 41% year over year to $871 million, return on equity hit 29%, credit portfolio growth reached 40%, deposits climbed 22%, and customer growth still ran at 14%.

Return on equity, or ROE, measures how efficiently a company turns shareholder capital into profit. A 29% ROE is strong by banking standards, and it tells you Nubank is not just growing for the sake of looking busy. It is growing while still making money, which is a good habit for a bank to have.

The stock is still down about 32% from its highs, even though the business continues to scale. It trades around 13 times forward earnings, which is where the valuation argument starts to get interesting. When a business is growing this quickly and still only trades at a low-teens multiple, the market is either being cautious for good reason or missing a pretty obvious compounding story.

Pronk’s key point is that the valuation still looks cheap because the company trades near a 13 forward PE ratio. He also notes that the company keeps growing across Southeast Asia and Brazil, but Nu’s story is really about Latin America, especially Brazil. In Brazil alone, it holds only 8% of unsecured loans, which leaves a lot of room for market share expansion if it can keep the customer experience and credit quality under control.

That last part matters. Digital banks can scale beautifully, but lending is where optimism can get mugged by reality. A growing credit portfolio is great until underwriting goes sloppy or macro conditions worsen. Brazil and the broader region bring currency, inflation, and credit-cycle risk. So yes, Nubank looks cheap for the growth rate, but cheap is not the same thing as easy.

“the valuation still looks cheap because the company trades near a 13 forward PE ratio.”

S&P Global: the boring compounder with a serious moat

S&P Global does not have the same flash as an e-commerce platform or a digital bank, but that is exactly why long-term investors pay attention. The stock is down about 26% from highs, even though revenue rose 10% and earnings per share also increased 10% in the quarter. The company bought back $1 billion of shares, which is the kind of capital return that signals management thinks the stock is worth owning.

S&P Global provides financial data, ratings, analytics, and benchmarks. In plain English, it sits on a mountain of market infrastructure that banks, asset managers, and other institutions rely on. That gives it a strong competitive advantage, or moat: a business edge that helps protect profits from competitors. The company also owns decades of proprietary financial data that competitors would struggle to replicate.

“The company owns decades of proprietary financial data that competitors would struggle to replicate.”

That moat may actually become more valuable in the age of artificial intelligence, not less. Pronk’s argument is that S&P Global could benefit from AI instead of losing business to it. That is a useful counterpoint to the usual fear-mongering, where every software or data company is supposedly one chatbot away from extinction. Some businesses are vulnerable to AI disruption. Others have the exact datasets and distribution channels that make AI a revenue tool instead of a wrecking ball.

Its forward P/E is near 20, while its historical median P/E is around 28.6. That means the market is currently valuing the business below its usual premium. For a company with recurring revenue, strong brand recognition, and buybacks, that is worth paying attention to. Of course, no moat is magic. Regulatory pressure, capital market cycles, and a slowdown in dealmaking or issuance can still hit earnings. But compared with a lot of the market’s noisier names, S&P Global looks like a relatively clean compounder.

“S&P Global could benefit from AI instead of losing business to it.”

Constellation Software: software so sticky the market may be overreacting to AI

Constellation Software is the sort of company that serious investors admire and casual investors usually ignore until they are already late. It owns hundreds of vertical market software businesses, meaning it acquires and runs software companies built for specific industries such as healthcare, logistics, accounting, or municipal systems. These are the unglamorous tools that keep businesses functioning. Boring? Yes. Profitable? Also yes.

The stock is down more than 50% from its highs, which is dramatic given that revenue growth has remained above 20% annually and trailing twelve-month free cash flow stands at $2.73 billion. Free cash flow is the cash left after expenses and investments, and that is the number that really matters when you want to know whether a company is actually generating economic value instead of just painting the tape.

Vertical market software tends to be sticky because customers rely on it deeply. Replacing it is expensive, disruptive, and usually a pain in the neck nobody wants. That gives Constellation a durable business model, and it has used that model to become a relentless acquirer of niche software assets.

The market worry is AI. Investors have gotten skittish about software stocks because they fear AI will rip through pricing power and make existing products obsolete. That concern is not completely insane; some software businesses really are exposed. But the counterargument is that fears about AI disrupting Constellation may be overdone. A lot of its software is embedded in workflows where reliability matters more than shiny demos and hype cycles.

“fears about AI disrupting Constellation may be overdone.”

Still, the valuation risk matters. Constellation has long deserved a premium, and part of the disappointment may simply be that expectations got ahead of themselves. When a beloved compounder gets marked down hard, it can mean opportunity. It can also mean the market is finally forcing a reality check. Both things can be true at once, which is why investing is such a lovely little psychological trap.

Construction Partners: roads, asphalt, and a very unsexy tailwind

Construction Partners rounds out the list with a thesis that does not sound exciting until you remember how much money governments and municipalities spend keeping roads functional. The company has generated about $3 billion in revenue over the last twelve months and expects revenue growth near 23% in 2026. Since 2020, it has completed 35 deals and sees more than 1,000 additional acquisition opportunities ahead.

Its core business is infrastructure maintenance and construction, especially roads, highways, bridges, and asphalt. Roads need maintenance every 10 to 15 years, and that simple fact is the heart of the investment case. It is not flashy, but it is durable. Asphalt does not care about TikTok, and potholes do not wait for a better macro backdrop.

“Roads need maintenance every 10 to 15 years.”

Construction Partners also benefits from a fragmented market, which gives it a chance to keep rolling up smaller operators. That acquisition strategy can work well when done carefully, but it is not risk-free. Integration matters. Debt matters. Timing matters. Infrastructure spending can also be lumpy, and interest rates can influence project economics and financing conditions.

Even so, the long-term setup looks reasonable. Public infrastructure spending remains a political priority in many places, and maintenance demand does not disappear just because markets get moody for a quarter or two. Compared with a lot of other cyclical names, Construction Partners has a very clear end market and a very practical reason to keep growing.

The macro mess still matters

These five names are being discussed against a noisy backdrop that still has a real grip on stock prices. Middle East tensions, especially involving Iran, have kept oil prices volatile. That matters because energy shocks can bleed into inflation expectations and investor sentiment. The U.S. 10-year Treasury yield has also pushed above 4.5% at times, which is a problem for growth stocks because higher rates reduce the present value of future earnings.

At the same time, NVIDIA beat expectations again, reminding everyone that AI remains the market’s favorite excuse for both euphoria and concentration risk. Chip stocks now make up more than 20% of the S&P 500, which is a wild reminder of how concentrated the index has become. When a handful of names dominate the tape, even strong companies outside that group can get ignored for no great fundamental reason.

Sector rotation adds another layer of confusion. Advance Auto Parts, for example, benefited from rotation and restructuring-driven optimism. That sort of move can be rational, but it can also be the market throwing darts while pretending it has a grand plan. Either way, it shows that fundamentals and sentiment are still in a knife fight, and sentiment often wins in the short term.

Key questions and takeaways

Why are these stocks being called undervalued?
Because their share prices have fallen sharply from highs while revenue, earnings, cash flow, or market share continue to improve. The market has de-rated them faster than the businesses have deteriorated, if they have deteriorated at all.

Is a low valuation enough to make a stock attractive?
No. A low multiple can be a bargain, or it can be the market warning you about real risk. Investors still need to weigh growth, margins, competition, debt, and macro pressure.

Which stock looks most defensive?
S&P Global stands out because of its proprietary data, recurring revenue streams, and share buybacks. It is not glamorous, but it has a durable business model.

Which stock has the biggest growth runway?
Nu Holdings looks especially promising because Nubank still has room to expand in Brazil and other Latin American markets, especially in unsecured lending and deposits.

Is AI a threat or an opportunity here?
Both. AI could pressure some software businesses, but it may also strengthen companies with rich proprietary data, like S&P Global, and may be less disruptive to sticky vertical software than some investors fear.

What is the biggest risk with buying undervalued growth stocks?
The biggest risk is confusing a lower share price with a better business. If growth slows, margins compress, or the macro backdrop turns uglier, a cheap-looking stock can stay cheap for a long time.

Which name looks most exposed to macro volatility?
Sea Limited and Nu Holdings both face meaningful regional and credit-cycle risk, while Construction Partners depends on infrastructure timing and execution. S&P Global and Constellation Software are more insulated, though certainly not immune.

The common thread across all five names is not that they are guaranteed winners. It is that the market may have gotten more pessimistic than the businesses deserve. Sea is still growing. Nu is still scaling. S&P Global still has a moat. Constellation still throws off serious cash. Construction Partners still has roads to pave and deals to do. Sometimes that is enough to create real opportunity. Sometimes it is just enough to make the next earnings report very interesting.