Undervalued long-term stocks are must-haves for any portfolio. They’re typically defined by trading below their inherent market value. Yet, these overlooked stocks have the potential to deliver massive long-term returns. Their strength lies in quietly building the foundations for long-term future success ahead. Consequently, this situation presents an opportune moment for investors to wager on these long-term stocks. At attractive prices, investors can capitalize on market inconsistencies.
The S&P 500’s rebound after the 2008 crisis proves the significant returns that can come from buying undervalued stocks in turbulent markets. For example, an investment of just $50 during that market could have grown by more than 200% to date. Such historical patterns underscore the vast potential of these investments. For those investors eyeing promising opportunities, these stocks are an astute choice.
For those seeking value, the present market provides a solid opportunity. With the market rally gathering momentum, these top three undervalued long-term stocks are set for solid future growth.
Luminar Technologies (LAZR)
Since 2012, Luminar Technologies (NASDAQ:LAZR) has revolutionized transportation with its pioneering lidar autonomous driving technology. Meeting critical demands for performance, safety, and cost, Luminar is pivotal for advancing Level 3 to Level 5 autonomous vehicles. Looking ahead, Statista projects that the autonomous vehicle market is set to surpass a staggering $2 trillion by 2030, positioning LAZR for incredible long-term expansion. And helmed by CEO Austin Russell, Luminar is venturing into the aviation sector through collaboration with Airbus (OTCMKTS:EADSY).
Financially, Luminar stands out with a remarkable forward revenue growth of 80.27%, eclipsing the sector’s median growth of 5.48% by a whopping 1365%. This financial prowess underscores the company’s strong position in the market.
Additionally, Luminar’s dedication to advancing LiDAR solutions is evident in its strategic alliance with Plus, a self-driving technology leader. This partnership not only cements Luminar as the sole long-range LiDAR provider for PlusDrive but also advances safety in commercial vehicles.
Currently, Tiprank’s analysts estimate the LAZR stock offers at least a 210% upside from current levels. These are the makings of an exceptional undervalued long-term stock.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) has evolved remarkably from facilitating mere online transactions to becoming a global digital payments leader. Now, it offers a diverse suite of services, catering to both individuals and businesses, demonstrating its adaptability and foresight in the ever-evolving digital finance sector.
Moreover, PayPal showcased an outstanding third quarter, reporting non-GAAP earnings per share of $1.30, surpassing projections by 7 cents. The company also recorded a revenue bump of 8.0% year-over-year, reaching $7.4 billion, which is $20 million higher than anticipated. This performance vividly demonstrates PayPal’s robust standing in the market, especially in its service to large enterprises.
Furthermore, PayPal’s investment in Magic and the launch of its stablecoin, PayPal USD (PYUSD), reflect a profound dedication to digital finance innovation. Additionally, acquiring Curv, a digital asset security firm, further strengthens its position in this dynamic sector. These strategic initiatives adeptly diversify PayPal’s portfolio, placing it at the forefront of the digital finance revolution. All the while, PYPL stock trades at just 2.3 times forward sales estimates, roughly 11% lower than the sector median. Although unexpected, this is clearly an undervalued long-term stock.
SharkNinja (SN)
SharkNinja (NYSE:SN) shines in the global market with its innovative lifestyle solutions, uniquely combining cutting-edge design and technology. Undervalued yet potent for long-term investment, this standout company captivates a diverse global audience, enhancing its allure in the competitive world of product design and technology.
Moreover, SharkNinja’s remarkable journey, marked by a consistent 20% yearly sales growth since 2008. Just last year, the company grew its net sales from $250 million to more than $3.7 billion, illustrating its financial strength and resilience. This remarkable history firmly establishes SharkNinja as a progressive and adaptable player in the dynamic global market.
Additionally, SharkNinja’s success stems from its balance of affordability and durability in its products, which is appealing in today’s budget-conscious market. This strategy enhances its appeal to a diverse customer base, reinforcing its reputation as a solid long-term investment. Jefferies analyst Randal Konik has given SN stock buy rating with a $67 target, foreseeing more than a 50% upside from current levels. He praised the firm’s innovative strategy, expecting new products to drive 15% to 20% of sales.
Following Konik’s lead, I’ve added this to my list for undervalued long-term stocks.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines