3 Undervalued Stocks With Earnings Growth Over 25%

US Treasury yields recently climbed after stronger August jobs data, which keeps rate expectations in focus and puts pressure on richly priced stocks. That is where high quality companies that still look cheap can become especially interesting. Investors who spot solid businesses at sensible valuations may find opportunities that others overlook. This article highlights three such underappreciated US stocks from our quality value screener.

The stocks below are just a starting sample from this idea. The full screen surfaced 44 more companies with equally compelling stories that are not covered here. To see the broader opportunity set, head straight into the High Quality Undervalued Stocks screener to identify, compare, and analyze the highest conviction candidates.

Bloom Energy (BE)

Overview: Bloom Energy provides on-site solid oxide fuel cell systems that generate reliable, high-efficiency, lower emission electricity from fuels like natural gas, biogas and hydrogen, with long-term service contracts that can support recurring cash flows. Its Bloom Electrolyzer extends this fuel cell technology into hydrogen production, giving the company a foothold in decarbonization and emerging clean energy markets without shifting focus away from its core power generation business.

Operations: Bloom Energy generates about US$3.1b in revenue from electrical equipment, with roughly US$2.9b from the United States and about US$261 million from other countries.

Market Cap: US$74.5b

Investors looking at Bloom Energy are essentially looking at a power-as-a-service business that aims to turn on-site fuel cell deployments and long-term maintenance contracts into durable cash flows, which fits neatly with the “high quality undervalued” theme. The recent inclusion in the S&P 500, growing AI data center demand and financing partnerships such as the expanded US$25b framework with Brookfield show how its technology is being pulled into real, scaled projects. At the same time, issues like past dilution, legal questions around scandium supply and share price volatility mean the story is not risk free. If the company can keep converting that pipeline into profitable, recurring revenue, the equity case becomes much harder to ignore.

Bloom Energy’s push into large scale projects and hydrogen can appear underappreciated alongside its share price swings. Scan the 3 key rewards and 4 important warning signs (1 is major!) to see what might be masking the full story.

MercadoLibre (MELI)

Overview: MercadoLibre runs a leading e-commerce marketplace across Brazil, Mexico, Argentina and other Latin American markets, paired with Mercado Pago, a fintech platform that processes payments, offers credit through Mercado Crédito and gives users invested-funds options via Mercado Fondo. While the marketplace drives most shopping volume, Mercado Pago’s recurring financial services and lending products are the key link to the High Quality Undervalued Stocks theme because they generate higher margin cash flows that support the wider ecosystem.

Operations: MercadoLibre generates about US$35.2b in revenue from internet software and services, with roughly US$18.9b from Brazil, US$8.1b from Mexico, US$6.6b from Argentina and US$1.6b from other countries.

Market Cap: US$100.3b

MercadoLibre interests investors who want more than a simple online retailer, because Mercado Pago is evolving into a broad Latin American fintech platform whose payments, credit and funds products feed a growing stream of recurring cash flows. Some analysts view earnings and revenue expectations positively, and returns on equity are already high, yet the stock trades below some future cash flow value estimates, which suggests the market may be underpricing the long term contribution from fintech. The trade off is that this growth is funded with meaningful debt and a lending model that can pressure margins if credit quality or funding costs shift. For investors who can accept that risk, the combination of a scaled marketplace and a rapidly expanding fintech arm can be a compelling setup to consider.

MercadoLibre’s fintech engine could be masking a much bigger story than the e-commerce headlines suggest. Get the full picture in the analyst forecasts for MercadoLibre and see where the real pressure points might emerge.

ServiceNow (NOW)

Overview: ServiceNow runs a cloud platform that automates digital workflows across IT, HR, customer service, security and other back office functions, with its IT service management, Workflow, App Engine and Automation Engine products forming the core that turns complex enterprise processes into recurring software subscriptions. This automation engine is the clearest link to the High Quality Undervalued Stocks theme because it can support strong cash generation from sticky customers while still leaving room for further development.

Operations: ServiceNow generates about US$14.7b in revenue from internet software and services, with roughly US$8.8b from the United States, US$3.8b from Europe, the Middle East and Africa, US$1.7b from Asia Pacific and other regions, and about US$507 million from the rest of North America.

Market Cap: US$146.0b

Investors looking at ServiceNow are looking at an infrastructure-like workflow platform that many large customers rely on every day, which helps explain why its earnings are described as high quality and why forecasts point to solid revenue and earnings expansion. The company’s push into AI driven automation and autonomous security through partnerships with groups such as Accenture, IBM and Tech Mahindra adds another layer of potential cash flow from existing clients. However, the stock carries premium P/E multiples, net margins have eased from 13.8% to about 11.3% and leadership tenure is relatively short, so execution risk is real. If ServiceNow keeps turning its deeply embedded workflows and AI contracts into durable subscription cash flows, the current valuation gap against fair value estimates may start to look more like an opportunity than a warning sign.

ServiceNow’s workflow engine and AI push are often viewed as a straightforward premium software story, but the growth profile suggests something more complex. Compare market expectations with the analyst forecasts for ServiceNow to see what might be hiding in plain sight.

Seeking Fresh Alternatives Before Others Do

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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