Businessman works from home, using laptops to check stocks. The best undervalued stocks of May were screened with testing that analyzed valuation and quality.
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Undervalued stocks offer downside protection and long-term growth potential. That duo sounds compelling when the stock market outlook relies on unknown factors, like the length and severity of the U.S.-Iran conflict. The challenge is that undervalued stocks can be tough to identify — many cheap stocks are priced low for a reason. Only a small percentage of bargain stocks are truly unappreciated by investors.
Still, some careful analysis can uncover those high-potential, lower-risk equities. That analysis begins with a strategic screening process, like the one outlined below. Once you have a list of companies that meet your parameters, you can follow up with in-depth research on the catalysts driving each company’s stock price.
Your undervalued stock screen should test for valuation and quality. Valuation metrics like forward P/E ratio and EV/EBITDA indicate how competitive the stock price is. Quality metrics like return on equity, debt-to-equity, free cash flow growth and revenue growth evaluate a company’s balance sheet health and business performance.
I identified candidates for May’s top undervalued stocks using these criteria:
The largest 11 companies meeting these criteria are listed in the table below. The metrics were sourced from company reports and StockAnalysis.com.
A closer look at each company follows. For more investing ideas, see best dividend stocks and best index funds for 2026.
Allstate sells insurance and related products in the U.S. and Canada.
Allstate’s qualifying metrics are:
Out of 18 analyst ratings, Allstate has four strong buy ratings, seven buys, six holds and one sell. According to the average price target, ALL has about 4.9% upside over the next year.
For 2025, Allstate reported 5.6% revenue growth and adjusted net income growth of 83.7%. The company raised its dividend and initiated a $4 billion share repurchase program to kick off when its current $1.5 billion buyback authorization is completed.
Ryanair is a large passenger airline holding company that oversees several airlines operating in Europe. The company is known for strong operational performance and efficiency.
Ryanair’s qualifying metrics are:
Ryanair has at least one strong buy recommendation and several buy ratings. The consensus price target indicates more than 25.8% upside for the stock.
The company’s last reported results covered the third quarter of fiscal year 2026. Highlights included 9% revenue growth with a 6% rise in operating costs. The company reported 84% of fuel hedged for the fourth quarter and 80% hedged for fiscal year 2027.
Arch Capital Group, based in Bermuda, provides insurance, reinsurance and mortgage insurance products in the U.S. and internationally.
Arch Capital’s qualifying metrics are:
Analyst ratings on Arch Capital range from strong buy to strong sell. Seven strong buy and buy ratings plus seven hold ratings push the average recommendation to buy, despite one strong sell from Goldman Sachs. The consensus price target predicts 11.7% upside for ACGL over the next year.
Arch CEO Nicolas Papadopoulo characterized the company’s 2025 financial performance as outstanding. Results included a 21.1% annualized net income return on average common equity, 32.3% increase in underwriting income and $798 million spent on share repurchases.
Cincinnati Financial is a U.S.-based property casualty insurance company serving consumer and commercial customers.
The qualifying metrics for Cincinnati Financial are:
Cincinnati Financial has two strong buy ratings, one buy rating and one hold recommendation. Per the average price target, CINF could appreciate 4.8% over the next year.
The insurance company produced 11% more revenue in 2025 versus 2024, while net income rose by 4%. Cash and marketable securities on the balance sheet grew by 7%. These results were strong, given the company’s significant exposure to the California wildfires in January 2025.
TIM S.A. is a Brazilian telecommunications provider offering landline, mobile and broadband services.
TIM S.A.’s qualifying metrics are:
TIM has one strong buy rating and three hold ratings. The consensus price target is about 6.5% lower than the current stock price.
TIM increased 2025 revenues by 4.6% compared to the prior year. Normalized net income grew by 37.4%. The company also raised its year-end cash balance by 3.4% on strong 2025 operating cash flow.
Universal Health operates acute care hospitals, ambulatory centers, emergency departments and behavioral health facilities through subsidiaries.
Universal Health’s qualifying metrics are:
Analyst ratings on Universal Health range from strong buy to sell. Three strong buys and one buy skew the average rating despite a sell and six hold recommendations. The upside on UHS is about 27.8% per the consensus price target.
Universal Health produced 9.7% more revenue in 2025 versus 2024, and operating income rose more than 18%. The company spent $967 million on share repurchases and $51 million on dividends last year.
Assurant provides insurance, service contracts and repair support on homes, cars, technology and other products. The company operates in 21 countries.
Assurant’s qualifying metrics are:
Analyst ratings on Assurant include two strong buys, three buys and one hold. The stock has 12.8% upside according to the average price target.
Assurant’s 2025 adjusted EBITDA was 16% higher than the prior year, and GAAP net income per diluted share rose 17%. The company spent $468 million on 2025 share repurchases and dividends.
Autoliv, based in Sweden, makes and sells automotive safety systems and components, such as airbags and seatbelts.
Autoliv’s qualifying metrics are:
Autoliv has one strong buy rating, five buy ratings, and five recommendations from analysts. Jefferies analyst Michael Aspinall did recently downgrade ALV, but the consensus price target implies about 13% upside.
In 2025, Autoliv increased sales by 4.1% and improved operating margin to 10.1% from 9.4%. The company expects another operating margin increase in 2026 to the range of 10.5% to 11%, along with $1.2 billion in operating cash flow.
The Hanover offers property and casualty insurance and related products to consumer and commercial customers in the U.S.
The Hanover’s qualifying metrics are:
The Hanover has three buy ratings and two hold ratings and about 7% upside, according to the consensus price target.
In 2025, the insurance company grew net premiums written by 3.9% and net income per diluted share rose 18.2%. The Hanover also recorded its highest annual operating ROE in the fourth quarter and increased its quarterly dividend by 5.6%.
Genpact is a technology-focused business service provider, delivering AI-powered solutions that support process efficiency and improved performance.
Genpact’s qualifying metrics are:
Genpact has strong buy ratings from Needham and TD Cowen, plus four hold ratings from other analysts. The consensus price target on the tech provider implies 36% upside.
Highlights from Genpact’s 2025 earnings report included 6.6% overall revenue growth, driven by a 17% increase in the company’s AI-driven solutions. The tech provider raised its dividend by 10%. The company’s 2026 guidance of 10% adjusted diluted EPS growth assumes continued strength in its Advanced Technology Solutions division.
Nice, based in Israel, operates an AI-powered customer experience platform and a platform that helps prevent financial fraud through subsidiaries.
NICE’s qualifying metrics are:
NICE has a mix of strong buy, buy and hold ratings. Citigroup recently downgraded the stock from to hold, but the consensus price target still implies nearly 46% upside.
In 2025, NICE increased revenue by 8% and diluted EPS by 11% from the prior year. CEO Scott Russell characterized it as a “transformative year for NICE, reflecting disciplined execution and strong AI momentum.” The company’s 2025 gross margin declined by 0.3 points but operating margin increased by 1.9 points versus 2024.
Undervalued stocks with upside should demonstrate strong business fundamentals, alongside a low price point. These 11 meet those terms today, but outlooks can change quickly. Dive into what makes each company tick to identify which, if any, are right for your portfolio.
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