The 7 Most Undervalued Nasdaq Stocks to Buy in February 2023
Thanks to the wild events of 2022, discerning investors enjoy plenty of bargains, particularly in the arena of the most undervalued Nasdaq stocks. Given the exchange’s bias toward technology players (including biotech), wagering in this space carries the advantage of relevance. Even if circumstances look shoddy right now, at some point, these enterprises have a shot at upside eventually.
Now, a word of caution is in order following the utterances of the last few words above. With the most undervalued Nasdaq stocks to buy, I’m not talking about the entire exchange, which also covers dubious businesses. Rather, I’m going to exclusively focus on names found on the Nasdaq 100 index. This way, we’re dealing with top companies and therefore, we’re less likely to deal with value traps.
As well, when I refer to the most undervalued Nasdaq stocks to buy, I’m going for the literal definition: discounted relative to trailing-12-month (TTM) earnings. As well, I’m utilizing Gurufocus.com’s earnings discount rankings relative to median trends found in a company’s underlying industry. Since I’m dealing strictly with objective data, please don’t shoot the messenger. And with that, below are the most undervalued Nasdaq stocks to buy.
One of the top biotechnology firms of the post-pandemic new normal, Moderna (NASDAQ:MRNA) helped forward the practical applications of the messenger-RNA-based approach. According to data from Gurufocus.com, the market prices MRNA at 6.54 times trailing earnings. In contrast, the sector median stands at 30.2 times.
Currently, Moderna’s earnings discount rates better than 87% of its competition. Just by pure numbers, MRNA, therefore, takes the top spot regarding the most undervalued Nasdaq stocks to buy. To be fair, I’d be remiss not to point out that Gurufocus.com warns Moderna may be a value trap. However, I’m less inclined to believe that because it features a healthy balance sheet and excellent profit margins. Moving forward, the company’s scientific acumen presents an incredible potential for growth.
Notably, Wall Street analysts rate MRNA as a consensus moderate buy. Even better, their average price target implies a potential upside of over 22%. Thus, bargain hunters may consider MRNA as one of the most undervalued Nasdaq stocks to buy.
Once one of the unquestioned leaders in the tech ecosystem, Intel (NASDAQ:INTC) suffered from rising vulnerabilities. Some of them centered on competitive headwinds while others focused on unforced internal errors. Still, Intel commands serious clout. Per Gurufocus.com, the market prices INTC at 13.2 times trailing earnings. For context, the sector median stands at 17.5 times.
At the moment, Intel’s earnings discount ranks better than nearly 77% of sector rivals. Adding to the narrative, Gurufocus.com states that based on its proprietary calculations for fair market value, INTC is significantly undervalued.
Other factors that bolster Intel’s case as one of the most undervalued Nasdaq stocks to buy include its price-earnings ratio, which trades at a multiple of 1.66. Further, Intel trades at 1.15 times its book value. Both stats rank below their respective sector median values.
Right now, Wall Street views INTC as a consensus hold. Also, their average price target implies a slight downside from here. Still, with exciting developments recently, Intel may be worth a look.
Cognizant Technology (CTSH)
Based in New Jersey, Cognizant Technology (NASDAQ:CTSH) is an information technology services and consulting firm. According to Gurufocus.com, the market prices CTSH at a trailing multiple of 14.5. In contrast, the sector median stands at 26.5 times.
Compared to other companies in the software industry, Cognizant’s discount relative to trailing earnings rates better than 75%. As an added bonus, CTSH trades at a forward multiple of 13.8 times, ranked better than over 80% of sector players. Holistically, then, Cognizant ranks among the most undervalued Nasdaq stocks to buy.
Other factors to consider include the IT firm’s balance sheet. Currently, its Altman Z-Score stands at 6.74, reflecting low bankruptcy risk. Also, the company features excellent profit margins. For instance, its net margin is over 12%, beating out over 82% of its peers. For transparency, Wall Street analysts rate Cognizant as a consensus hold. Also, their average price target implies 5.5% downside. Still, a year-to-date performance of over 13% may suggest a sentiment reversal.
Another top enterprise in the broader scientific field that made its name during the coronavirus pandemic, Regeneron (NASDAQ:REGN) focuses on bringing life-transforming medicine to patients in need. Per Gurufocus.com, the market prices REGN at a trailing multiple of 15.5. This compares favorably to the sector median of 30.2 times.
Currently, Regeneron’s discount on earnings ranks better than 69% of the competition. Moreover, REGN trades at a forward multiple of 18.4, below the sector median of 25.9. Here too, Regeneron makes for a holistic idea among the most undervalued Nasdaq stocks to buy.
It gets better. On the balance sheet, Regeneron enjoys fiscal stability. Operationally, the company’s three-year revenue growth rate stands at 47.3%, smoking the competition. On the bottom line, outstanding profit margins undergird REGN.
Leaving no doubt, Wall Street analysts rate REGN as a consensus strong buy. With an average price target implying an upside of almost 15%, Regeneron easily represents one of the most undervalued Nasdaq stocks to buy.
Headquartered in Cambridge Massachusetts, Biogen (NASDAQ:BIIB) specializes in the discovery, development, and delivery of therapies for the treatment of neurological diseases to patients worldwide. According to Gurufocus.com, BIIB trades hands at a trailing multiple of 14.6. For context, the sector median pings at 20.9 times.
Moreover, the aforementioned investment resource states that Biogen’s earnings discount ranks better than nearly 68% of the competition. Therefore, BIIB makes an objective case for inclusion among the most undervalued Nasdaq stocks to buy.
Admittedly, though, BIIB presents higher risks than other biotech players. For instance, while its balance sheet rates as generally stable, we’ve seen better stats. Regarding its three-year revenue growth rate, Biogen is middling at 3.9%. However, it does make up for this in the bottom line. Primarily, its net margin stands at 27.6%, outpacing 93% of the competition. Presently, Wall Street analysts rate BIIB as a consensus moderate buy. Further, their price target implies an upside potential of nearly 11%.
Charter Communications (CHTR)
A telecommunications and mass media company, Charter Communications (NASDAQ:CHTR) commands over 32 million customers in 41 states. Using data provided by Gurufocus.com, CHTR trades at a trailing multiple of nearly 17. In contrast, the sector median pings at 15.7 times. Right now, Charter’s discount against trailing earnings ranks better than over 66% of the competition. Notably, CHTR also trades at a forward multiple of 10.5 times, ranking better than nearly 74% of sector players. Thus, it’s a holistic example of the most undervalued Nasdaq stocks to buy.
Unfortunately, Charter may be undervalued but Gurufocus.com also warns that it’s a possible value trap. Granted, the telecom sector – particularly when involving cable – presents relevancy concerns. Thus, Charter doesn’t have the best balance sheet stability. However, I’d be remiss on the other end to ignore that it’s a profitable business.
Also, Wall Street analysts rate CHTR as a consensus moderate buy with a price target implying nearly 27% upside potential. Therefore, it’s still well in the running for the most undervalued Nasdaq stocks to buy.
Headquartered in Boise, Idaho, Micron (NASDAQ:MU) is a producer of computer memory and computer data storage including dynamic random-access memory, flash memory, and USB flash drives. At the moment, the market prices MU at a trailing multiple of 11.2 times. For context, the sector median stands at 17.5 times.
Presently, Micron’s discount on trailing earnings ranks better than over 64% of its rivals. Also, prospective investors may want to note that MU trades at 1.37 times its book value. That’s lower than nearly 70% of peers, making MU one of the most undervalued Nasdaq stocks to buy.
Let’s be honest – the troubles of 2022 hurt companies like Micron quite badly. In the trailing year, shares dipped 25% below parity. However, it features a strong balance sheet and a robustly profitable business.
Not surprisingly, Wall Street analysts rate MU as a consensus moderate buy. Also, hedge fund sentiment rates as very positive, providing confidence that Micron represents one of the most undervalued Nasdaq stocks to buy.
On the date of publication, Josh Enomoto 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.