11 Oversold Stocks with Strong Fundamentals to Consider Now

In a recent analysis, investment experts identified a range of oversold stocks with robust fundamentals that may offer potential upside. Jim Walker, Chief Economist at Aletheia Capital, expressed concerns about the economic outlook for 2026, highlighting a likely slowdown across advanced economies including the United States, Europe, the UK, and Japan. He noted that emerging markets like India and China will need to stimulate their domestic economies to counterbalance the anticipated declines.

Economic Indicators and Stock Selection

Walker emphasized that investors should closely monitor the investment component of GDP in the US, particularly as housing market conditions and interest rate trends suggest a potential slowdown. He projects US GDP growth to average only 2.2% in the coming year. Despite this, there are bright spots, particularly in the realm of artificial intelligence (AI). According to State Street Investment Management, the US remains at the forefront of AI trade, with capital spending expected to rise to approximately $520 billion in 2026, representing over 30% year-on-year growth.

Given these dynamics, we turn to the 11 oversold stocks identified as having strong fundamentals. The selection process involved analyzing various rankings, focusing on stocks that have seen declines of at least 26% over the past six months, while also showing potential for recovery. The stocks are ranked according to hedge fund sentiment as of the third quarter of 2025.

Highlighted Stocks for Investment

1. **Chipotle Mexican Grill, Inc. (NYSE:CMG)**
– 5-Year Revenue Growth: ~15.1%
– 5-Year EPS Growth: ~45.3%
– 6-Month Decline: ~28.3%
– Average Upside Potential: ~10%
– Number of Hedge Fund Holders: 65

Chipotle’s stock has recently been rated “Outperform” by Telsey Advisory, with a price target of $50. Analysts expect improvements in consumer spending driven by tax refunds and company initiatives.

2. **Fortinet, Inc. (NASDAQ:FTNT)**
– 5-Year Revenue Growth: ~21.6%
– 5-Year EPS Growth: ~32.4%
– 6-Month Decline: ~26.4%
– Average Upside Potential: ~12%
– Number of Hedge Fund Holders: 44

The company has introduced its Secure AI Data Center solution, which is expected to enhance its market position. Analysts remain optimistic about Fortinet’s future prospects.

3. **Brown & Brown, Inc. (NYSE:BRO)**
– 5-Year Revenue Growth: ~16%
– 5-Year EPS Growth: ~15.4%
– 6-Month Decline: ~25.2%
– Average Upside Potential: ~17.3%
– Number of Hedge Fund Holders: 44

Despite a challenging outlook for the insurance sector, Brown & Brown continues to attract attention from analysts, although price targets have been adjusted downwards.

4. **PayPal Holdings, Inc. (NASDAQ:PYPL)**
– 5-Year Revenue Growth: ~10.1%
– 5-Year EPS Growth: ~13.4%
– 6-Month Decline: ~19.2%
– Average Upside Potential: ~21.4%
– Number of Hedge Fund Holders: 86

Analysts have noted a more gradual growth outlook for PayPal, but partnerships such as with Paychex may enhance its service offerings.

5. **Netflix, Inc. (NASDAQ:NFLX)**
– 5-Year Revenue Growth: ~13%
– 5-Year EPS Growth: ~31%
– 6-Month Decline: ~30%
– Average Upside Potential: ~46.6%
– Number of Hedge Fund Holders: 154

Netflix recently reaffirmed its commitment to a merger agreement, which analysts believe will add value in the long term, despite some downgrades in stock rating.

6. **Coinbase Global, Inc. (NASDAQ:COIN)**
– 5-Year Revenue Growth: ~55.3%
– 5-Year EPS Growth: ~91.1%
– 6-Month Decline: ~29%
– Average Upside Potential: ~48.2%
– Number of Hedge Fund Holders: 73

Analysts remain bullish on Coinbase despite recent trading volume declines, anticipating a resurgence driven by new product initiatives.

7. **Super Micro Computer, Inc. (NASDAQ:SMCI)**
– 5-Year Revenue Growth: ~44.8%
– 5-Year EPS Growth: ~56.4%
– 6-Month Decline: ~39.7%
– Average Upside Potential: ~49.2%
– Number of Hedge Fund Holders: 42

The company has secured a substantial credit facility to bolster its operations, reflecting confidence in its fundamentals.

8. **ServiceNow, Inc. (NYSE:NOW)**
– 5-Year Revenue Growth: ~24.5%
– 5-Year EPS Growth: ~18.9%
– 6-Month Decline: ~28.1%
– Average Upside Potential: ~51.2%
– Number of Hedge Fund Holders: 104

Analysts have mixed views on ServiceNow’s recent acquisition, but overall sentiment remains positive for its future growth.

9. **The Trade Desk, Inc. (NASDAQ:TTD)**
– 5-Year Revenue Growth: ~30.6%
– 5-Year EPS Growth: ~24.3%
– 6-Month Decline: ~48.5%
– Average Upside Potential: ~57.5%
– Number of Hedge Fund Holders: 42

Despite facing significant competition, The Trade Desk is viewed as having an attractive risk-reward profile that could yield substantial returns.

This analysis highlights that while market conditions may be challenging, there are fundamentally strong companies that present attractive investment opportunities. Investors are encouraged to conduct thorough research and consider these stocks as part of a diversified portfolio strategy.