An undervalued stock is one that consistently demonstrates profitability and exhibits promising long-term growth potential. Its share price is not only inexpensive compared to its peers but also relative to the anticipated future profits it is expected to generate. These stocks can be particularly appealing to patient buy-and-hold investors willing to wait for opportunities that may not be immediately apparent.
However, it’s crucial to note that while investors are always seeking favorable deals, some stocks are deemed “cheap” for valid reasons. These reasons may include diminished growth prospects, financial losses, or increasing competition from new market entrants. Stocks falling into this category, often referred to as “value traps,” should not be considered undervalued, even if their prices are considerably low.
This article will delve into the analysis of 5 undervalued NASDAQ stocks worth considering for purchase.
5 Undervalued NASDAQ Stocks To Buy Now
SaverOne (SVRE)
SaverOne 2014 Ltd’s (NASDAQ: SVRE) system is implemented in vehicles to address the issue of driver distraction caused by the use of distracting mobile applications while driving, posing a risk to the safety of both the driver and passengers. This behavior is recognized as a significant contributor to global road accidents.
According to the US National Highway Traffic Safety Administration, the annual cost of road accidents in the United States alone is approximately $870 billion, excluding expenses related to severe injuries or fatalities.
About a quarter of these accidents are estimated to be linked to mobile phone use while driving. SaverOne’s technology specifically identifies the driver’s area within the vehicle, prohibiting access to distracting applications like messaging while permitting others, such as navigation, without requiring user intervention or consent. This approach aims to create a safer driving environment.
SaverOne Announces First Strategic Pilot in Italy with Tecne Autostrade
SaverOne 2014 Ltd., a technology company specializing in transportation safety solutions, has announced a strategically significant pilot project with Tecne, the engineering company of Gruppo Autostrade per l’Italia—one of Europe’s leading concessionaries for toll motorways, managing 3,000 km of road network in Italy.
The pilot will involve integrating SaverOne’s Driver Distraction Prevention System (DDPS) into an initial 10 vehicles within Tecne Autostrade’s fleet, which comprises approximately 3,000 vehicles, indicating substantial potential for SaverOne.
This new pilot project with Tecne aligns with SaverOne’s strategy to expand its presence in European markets significantly. It follows the recent strategic appointment of Mr. Tal Yihie as the Italian Country Partner, a new distribution agreement with Milan-based GVZ, and SaverOne’s Memorandum of Understanding (MOU) and ongoing collaboration with the Italian-based OEM Iveco. These initiatives collectively contribute to enhancing SaverOne’s growth and sales strategy in the region. READ MORE
Amazon (AMZN)
The e-commerce trailblazer Amazon (NASDAQ: AMZN) definitively settled the question years ago about the profitability of its extensive operations. Nevertheless, the company increased its expenditures during the pandemic to reinforce its dominance in e-commerce and sustain its expansion into various sectors of the economy.
Consequently, Amazon may not be the first company that comes to mind as an undervalued enterprise, considering its current lower rate of profitability. It remains predominantly a growth stock.
Amazon had outpaced the initial e-commerce surge it experienced in the early stages of the pandemic in 2020 and 2021, a period marked by heightened online shopping activity. However, in 2023, the global economic challenges have started affecting its flagship service, Amazon Web Services (AWS).
Intel (INTC)
Intel (NASDAQ: INTC) continues to accumulate positive catalysts. Firstly, analysts at Citi have indicated that Intel’s third-quarter results are expected to surpass its guidance, attributed to higher-than-anticipated shipments of notebook computers. Secondly, Nvidia (NASDAQ: NVDA) has expressed openness to allowing Intel to manufacture its chips.
Thirdly, recent observations suggest that Intel’s new AI chip could compete head-to-head with Nvidia’s equivalent offering, with the added advantage of being significantly more cost-effective. Despite these favorable developments, Intel maintains a forward price-earnings ratio of 22, which aligns closely with the average price-to-earnings (P/E) ratio of the S&P 500.
EVgo (EVGO)
EVgo (NASDAQ: EVGO) operates one of the largest networks of fast electric vehicle chargers in the United States. The company has established partnerships with notable entities such as General Motors, Tesla (NASDAQ: TSLA), Ford (NYSE: F), and Hyundai (OTCMKTS: HYMTF).
A positive development is that EVgo has confirmed that its fast chargers align with the Biden administration’s criteria for federal reimbursement. This announcement suggests that funding for numerous EV chargers, in accordance with the terms of the Bipartisan Infrastructure Law, is likely to be released by Washington in the near future.
Furthermore, the company is experiencing rapid growth, with its revenue surging approximately 457% year over year to $50.6 million.
According to CEO Cathy Zoi, “EVgo had a phenomenal second quarter with significant growth in key areas including stalls, throughput, customer accounts, utilization, and revenue. We are pleased to report EVgo’s network throughput growth is accelerating, demonstrating the leverage in our business and financial model as the auto sector rapidly electrifies.”
Cisco Systems (CSCO)
Cisco Systems (NASDAQ: CSCO) stands as a prominent networking company engaged in the manufacturing and distribution of networking equipment. With a presence in over 190 countries, the company also offers industrial services, leveraging its global recognition to drive increased sales.
Over the past year, Cisco has experienced substantial growth, with a significant contribution from the telecommunications sector. The global telecommunications market is projected to exhibit a 6% Compound Annual Growth Rate (CAGR), expanding from $1.81 trillion in 2022 to an estimated $2.65 trillion by 2030. This anticipated growth is poised to benefit Cisco in the long term.
The company recently reported robust financial performance for its latest quarter. Notably, it achieved a revenue of $15.2 billion, marking a 16% year-over-year (YoY) increase. Diluted Earnings Per Share (EPS) of 0.97 witnessed a substantial 43% YoY growth, and net income reached $12.6 billion, reflecting a remarkable 36% increase compared to the same quarter in the company’s fiscal year 2022.
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