10 Best 52w Low Stocks for February 2026
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Market Overview & Selection Criteria
The technology sector has faced headwinds with many leading software and services companies experiencing negative 1-year returns amid market volatility and growth slowdowns. ValueSense analysis highlights 10 undervalued stock picks selected based on intrinsic value metrics, where current market prices appear below calculated intrinsic values for several names, indicating potential margin of safety. Criteria include Quality rating above 6.0, strong ROIC above 10%, positive revenue growth, healthy FCF margins over 15%, and elevated debt levels flagged for review. These picks focus on enterprise software, fintech, streaming, and data services firms with robust free cash flow generation, positioned for recovery in a stabilizing economic environment. This watchlist emphasizes diversified tech exposure for educational analysis.
Featured Stock Analysis
Stock #1: Netflix, Inc. (NFLX)
| Metric | Value |
|---|---|
| Market Cap | $352.4B |
| Quality Rating | 7.7 |
| Intrinsic Value | $91.8 |
| 1Y Return | -14.2% |
| Revenue | $45.2B |
| Free Cash Flow | $9,461.1M |
| Revenue Growth | 15.8% |
| FCF margin | 20.9% |
| Gross margin | 48.5% |
| ROIC | 33.5% |
| Total Debt to Equity | 54.3% |
Investment Thesis
Netflix, Inc. (NFLX) stands out with a Quality rating of 7.7 and impressive operational efficiency, boasting ROIC at 33.5% and gross margin of 48.5%. Despite a -14.2% 1-year return, the company generates $45.2B in revenue and $9,461.1M in free cash flow, supported by 15.8% revenue growth and a solid 20.9% FCF margin. ValueSense intrinsic value of $91.8 suggests significant undervaluation relative to market cap of $352.4B, making it a compelling case for analysis in the streaming sector. Strong cash flow supports content investment and global expansion, positioning NFLX for subscriber recovery.
Key Catalysts
- Robust revenue growth at 15.8% drives scalable profitability
- High ROIC of 33.5% indicates efficient capital allocation
- FCF margin of 20.9% enables reinvestment without dilution
Risk Factors
- Total Debt to Equity at 54.3% requires monitoring amid content spending
- Competitive streaming landscape could pressure subscriber growth
- Negative 1Y return signals short-term market sentiment challenges
Stock #2: SAP SE (SAP)
| Metric | Value |
|---|---|
| Market Cap | $236.7B |
| Quality Rating | 6.6 |
| Intrinsic Value | $269.6 |
| 1Y Return | -28.0% |
| Revenue | €35.3B |
| Free Cash Flow | €8,395.8M |
| Revenue Growth | 3.4% |
| FCF margin | 23.8% |
| Gross margin | 73.5% |
| ROIC | 17.2% |
| Total Debt to Equity | 17.8% |
Investment Thesis
SAP SE (SAP), a leader in enterprise software, shows a Quality rating of 6.6 with standout gross margin of 73.5% and FCF margin of 23.8%. With €35.3B revenue, €8,395.8M free cash flow, and 3.4% revenue growth, the firm maintains ROIC at 17.2% despite a -28.0% 1-year return. Intrinsic value of $269.6 points to undervaluation against $236.7B market cap, highlighting potential in cloud transitions. Low Total Debt to Equity of 17.8% bolsters balance sheet strength for long-term analysis.
Key Catalysts
- Exceptional gross margin of 73.5% supports pricing power
- FCF margin at 23.8% funds R&D in AI and cloud
- Conservative debt at 17.8% enhances financial flexibility
Risk Factors
- Modest revenue growth of 3.4% amid economic slowdowns
- Currency fluctuations from euro-denominated metrics
- 1Y return decline of -28.0% reflects sector rotation
Stock #3: Salesforce, Inc. (CRM)
| Metric | Value |
|---|---|
| Market Cap | $203.0B |
| Quality Rating | 6.9 |
| Intrinsic Value | $216.2 |
| 1Y Return | -38.2% |
| Revenue | $40.3B |
| Free Cash Flow | $12.9B |
| Revenue Growth | 8.4% |
| FCF margin | 32.0% |
| Gross margin | 77.7% |
| ROIC | 10.3% |
| Total Debt to Equity | 18.6% |
Investment Thesis
Salesforce, Inc. (CRM) earns a Quality rating of 6.9, driven by $40.3B revenue, $12.9B free cash flow, and 8.4% revenue growth. FCF margin shines at 32.0% with gross margin of 77.7%, though ROIC is 10.3% and 1-year return -38.2%. Intrinsic value of $216.2 indicates undervaluation for its $203.0B market cap, ideal for CRM software analysis. Debt to equity at 18.6% remains manageable.
Key Catalysts
- Leading FCF margin of 32.0% fuels acquisitions
- High gross margin 77.7% from subscription model
- Revenue growth 8.4% in enterprise cloud demand
Risk Factors
- Lower ROIC of 10.3% vs. peers signals efficiency gaps
- Sharp -38.2% 1Y return amid growth deceleration
- Integration risks from past M&A activity
Stock #4: Intuit Inc. (INTU)
| Metric | Value |
|---|---|
| Market Cap | $139.7B |
| Quality Rating | 7.1 |
| Intrinsic Value | $511.0 |
| 1Y Return | -17.5% |
| Revenue | $19.4B |
| Free Cash Flow | $6,353.0M |
| Revenue Growth | 17.1% |
| FCF margin | 32.7% |
| Gross margin | 80.8% |
| ROIC | 18.9% |
| Total Debt to Equity | 35.1% |
Investment Thesis
Intuit Inc. (INTU) features a Quality rating of 7.1, with $19.4B revenue, $6,353.0M free cash flow, and strong 17.1% revenue growth. FCF margin at 32.7%, gross margin 80.8%, and ROIC 18.9% underscore fintech strength, despite -17.5% 1-year return. Intrinsic value $511.0 vs. $139.7B market cap highlights value opportunity. Debt to equity 35.1% is moderate.
Key Catalysts
- Revenue growth 17.1% from TurboTax and QuickBooks
- Top-tier gross margin 80.8% and FCF 32.7%
- ROIC 18.9% reflects sticky SMB customer base
Risk Factors
- Seasonal revenue tied to tax cycles
- Debt to equity 35.1% amid expansion investments
- -17.5% 1Y return pressures valuation multiples
Stock #5: ServiceNow, Inc. (NOW)
| Metric | Value |
|---|---|
| Market Cap | $121.4B |
| Quality Rating | 7.2 |
| Intrinsic Value | $63.0 |
| 1Y Return | -42.2% |
| Revenue | $13.3B |
| Free Cash Flow | $4,576.0M |
| Revenue Growth | 20.9% |
| FCF margin | 34.5% |
| Gross margin | 77.5% |
| ROIC | 15.6% |
| Total Debt to Equity | 24.7% |
Investment Thesis
ServiceNow, Inc. (NOW) scores Quality rating 7.2, generating $13.3B revenue and $4,576.0M free cash flow with 20.9% revenue growth. FCF margin 34.5%, gross margin 77.5%, ROIC 15.6%, but -42.2% 1-year return. Intrinsic value $63.0 suggests deep undervaluation at $121.4B market cap. Debt to equity 24.7% supports growth.
Key Catalysts
- Accelerating 20.9% revenue growth in IT service management
- Elite FCF margin 34.5% for platform investments
- Strong gross margin 77.5% from SaaS scalability
Risk Factors
- Steep -42.2% 1Y return indicates volatility
- High growth expectations could lead to misses
- Debt 24.7% in competitive workflow automation
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Stock #6: Automatic Data Processing, Inc. (ADP)
| Metric | Value |
|---|---|
| Market Cap | $98.8B |
| Quality Rating | 6.7 |
| Intrinsic Value | $117.9 |
| 1Y Return | -18.6% |
| Revenue | $21.2B |
| Free Cash Flow | $4,596.5M |
| Revenue Growth | 6.6% |
| FCF margin | 21.7% |
| Gross margin | 48.4% |
| ROIC | 29.5% |
| Total Debt to Equity | 72.4% |
Investment Thesis
Automatic Data Processing, Inc. (ADP) holds Quality rating 6.7, with $21.2B revenue, $4,596.5M free cash flow, and 6.6% growth. ROIC excels at 29.5%, FCF margin 21.7%, gross margin 48.4%, despite -18.6% 1-year return. Intrinsic value $117.9 vs. $98.8B market cap flags value. Higher debt to equity 72.4% noted.
Key Catalysts
- Superior ROIC 29.5% from payroll outsourcing moat
- Steady FCF margin 21.7% for dividends
- Revenue growth 6.6% in HR services
Risk Factors
- Elevated debt to equity 72.4% vulnerable to rates
- Slower growth 6.6% vs. high-flyers
- -18.6% 1Y return reflects labor market shifts
Stock #7: RELX Plc (RELX)
| Metric | Value |
|---|---|
| Market Cap | $66.6B |
| Quality Rating | 7.9 |
| Intrinsic Value | $25.4 |
| 1Y Return | -28.9% |
| Revenue | £18.8B |
| Free Cash Flow | £5,027.0M |
| Revenue Growth | 11.4% |
| FCF margin | 26.7% |
| Gross margin | 64.7% |
| ROIC | 38.4% |
| Total Debt to Equity | 343.4% |
Investment Thesis
RELX Plc (RELX) leads with Quality rating 7.9, £18.8B revenue, £5,027.0M free cash flow, 11.4% growth. ROIC 38.4%, FCF margin 26.7%, gross margin 64.7%, -28.9% 1-year return. Intrinsic value $25.4 at $66.6B market cap. High debt to equity 343.4% a key watch item.
Key Catalysts
- Exceptional ROIC 38.4% from data analytics
- FCF margin 26.7% supports buybacks
- 11.4% revenue growth in scientific publishing
Risk Factors
- Very high debt to equity 343.4% risks refinancing
- GBP exposure for non-UK investors
- -28.9% 1Y return amid cyclical concerns
Stock #8: PayPal Holdings, Inc. (PYPL)
| Metric | Value |
|---|---|
| Market Cap | $50.7B |
| Quality Rating | 6.0 |
| Intrinsic Value | $101.9 |
| 1Y Return | -41.2% |
| Revenue | $32.9B |
| Free Cash Flow | $5,565.0M |
| Revenue Growth | 4.5% |
| FCF margin | 16.9% |
| Gross margin | 46.8% |
| ROIC | 24.9% |
| Total Debt to Equity | 55.8% |
Investment Thesis
PayPal Holdings, Inc. (PYPL) has Quality rating 6.0, $32.9B revenue, $5,565.0M free cash flow, 4.5% growth. ROIC 24.9%, FCF margin 16.9%, gross margin 46.8%, -41.2% 1-year return. Intrinsic value $101.9 vs. $50.7B market cap shows promise. Debt to equity 55.8%.
Key Catalysts
- Solid ROIC 24.9% in digital payments
- FCF $5,565.0M for ecosystem expansion
- Large revenue base $32.9B with recovery potential
Risk Factors
- Lowest quality rating 6.0 among peers
- Weakest growth 4.5% and FCF margin 16.9%
- Severe -41.2% 1Y return competition pressures
Stock #9: Thomson Reuters Corporation (TRI)
| Metric | Value |
|---|---|
| Market Cap | $49.7B |
| Quality Rating | 6.2 |
| Intrinsic Value | $116.8 |
| 1Y Return | -34.3% |
| Revenue | $7,379.9M |
| Free Cash Flow | $1,831.3M |
| Revenue Growth | 2.4% |
| FCF margin | 24.8% |
| Gross margin | 39.7% |
| ROIC | 13.4% |
| Total Debt to Equity | 18.5% |
Investment Thesis
Thomson Reuters Corporation (TRI) rates 6.2 quality, $7,379.9M revenue, $1,831.3M free cash flow, 2.4% growth. FCF margin 24.8%, ROIC 13.4%, gross margin 39.7%, -34.3% 1-year return. Intrinsic value $116.8 at $49.7B market cap. Low debt 18.5%.
Key Catalysts
- Healthy FCF margin 24.8% from professional services
- Stable ROIC 13.4% in legal/financial data
- Low debt 18.5% for steady operations
Risk Factors
- Slowest growth 2.4% in group
- Lower gross margin 39.7% vs. software peers
- -34.3% 1Y return on content commoditization
Stock #10: Workday, Inc. (WDAY)
| Metric | Value |
|---|---|
| Market Cap | $46.5B |
| Quality Rating | 10.0 |
| Intrinsic Value | $217.7 |
| 1Y Return | -32.5% |
| Revenue | $9,216.0M |
| Free Cash Flow | $2,585.0M |
| Revenue Growth | 0.3% |
| FCF margin | 28.0% |
| Gross margin | 77.5% |
| ROIC | 8.1% |
| Total Debt to Equity | 42.7% |
Investment Thesis
Workday, Inc. (WDAY) tops Quality rating at 10.0, $9,216.0M revenue, $2,585.0M free cash flow, 0.3% growth. FCF margin 28.0%, gross margin 77.5%, ROIC 8.1%, -32.5% 1-year return. Intrinsic value $217.7 vs. $46.5B market cap. Debt to equity 42.7%.
Key Catalysts
- Highest quality score 10.0 for HCM software
- Strong FCF margin 28.0% and gross 77.5%
- Elite rating despite modest growth
Risk Factors
- Near-zero revenue growth 0.3% stalls momentum
- Lowest ROIC 8.1% indicates capital intensity
- -32.5% 1Y return from enterprise sales cycles
Portfolio Diversification Insights
These 10 stock picks cluster in technology, primarily enterprise software (CRM, SAP, NOW, INTU, WDAY, ADP), fintech (PYPL), streaming (NFLX), and data/analytics (RELX, TRI). Allocation favors software at ~70% by market cap, with NFLX adding consumer tech and RELX/TRI information services for balance. High ROIC leaders like RELX 38.4% and NFLX 33.5% complement growth names like NOW (20.9% revenue). Debt varies—low in SAP/CRM, high in RELX/ADP—suggesting pairing low-debt stabilizers with cash-rich growers. Cross-analysis shows average Quality rating ~7.0, FCF margins 25%+, enabling diversified exposure to tech recovery without overconcentration.
Market Timing & Entry Strategies
Consider positions during sector dips, as negative 1Y returns (-14.2% to -42.2%) align with 52-week lows per ValueSense screening. Monitor quarterly earnings for revenue acceleration (e.g., NOW's 20.9%) and FCF trends. Dollar-cost average into high intrinsic value gaps like INTU $511.0 or SAP $269.6, scaling on ROIC stability above 15%. Educational entry: Track debt metrics pre-rate hikes; favor quality >7.0 (NFLX, RELX, NOW, INTU) for resilience.
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FAQ Section
How were these stocks selected?
Selected via ValueSense methodology focusing on intrinsic value below market prices, Quality ratings 6.0+, strong ROIC, FCF margins >15%, and revenue growth, drawn from 52-week low opportunities.
What's the best stock from this list?
Workday (WDAY) boasts the highest Quality rating 10.0, while RELX leads ROIC at 38.4%; compare intrinsic values like INTU's $511.0 for personalized analysis.
Should I buy all these stocks or diversify?
Diversify across subsectors—software, fintech, data—for balanced tech exposure, weighting by market cap and debt levels to mitigate correlated risks.
What are the biggest risks with these picks?
Key concerns include high debt (RELX 343.4%, ADP 72.4%), slow growth (TRI 2.4%, WDAY 0.3%), and negative 1Y returns averaging -30%, plus sector-wide competition.
When is the best time to invest in these stocks?
Optimal during earnings beats on revenue/FCF, or broader tech rebounds; use intrinsic value gaps and Quality ratings >7.0 as entry signals for educational positioning.