10 Best Undervalued Growth Stocks At 52w Low for February 2026
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Market Overview & Selection Criteria
The current market environment shows many growth-oriented technology and software companies trading near 52-week lows amid broader sector corrections, presenting potential value opportunities for analysis. ValueSense selected these 10 best undervalued growth stocks based on intrinsic value calculations, quality ratings, and key financial metrics like revenue growth, free cash flow margins, ROIC, and debt levels. Stocks were filtered for those where market prices appear below estimated intrinsic values, strong gross margins above 40%, and positive FCF generation, focusing on top stocks to buy now in tech-heavy sectors for diversified stock watchlist consideration. This methodology highlights investment opportunities in best value stocks without implying recommendations.
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 robust Market Cap of $352.4B, Quality rating of 7.7, and Intrinsic value of $91.8, suggesting undervaluation relative to its scale in streaming. Despite a 1Y Return of -14.2%, the company demonstrates solid fundamentals including Revenue of $45.2B, Free Cash Flow of $9,461.1M, Revenue growth of 15.8%, FCF margin of 20.9%, Gross margin of 48.5%, ROIC of 33.5%, and Total Debt to Equity of 54.3%. This profile indicates a mature growth leader with high profitability and cash generation, positioning NFLX as a core holding in NFLX analysis for long-term undervalued stocks to buy.
The combination of strong ROIC and revenue expansion underscores Netflix's competitive moat in content and subscriber growth, making it a focal point in technology stock picks.
Key Catalysts
- High Revenue growth at 15.8% supports scaling in global markets
- Exceptional ROIC of 33.5% reflects efficient capital use
- Strong FCF of $9,461.1M enables content investment and buybacks
- Healthy Gross margin of 48.5% amid pricing power
Risk Factors
- Moderate Total Debt to Equity at 54.3% could pressure in downturns
- Negative 1Y Return signals short-term market skepticism
Stock #2: 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), with a Market Cap of $46.5B and top-tier Quality rating of 10.0, offers an Intrinsic value of $217.7, highlighting potential in enterprise software despite 1Y Return of -32.5%. Key metrics include Revenue of $9,216.0M, Free Cash Flow of $2,585.0M, modest Revenue growth of 0.3%, FCF margin of 28.0%, impressive Gross margin of 77.5%, ROIC of 8.1%, and Total Debt to Equity of 42.7%. This data paints WDAY as a high-quality SaaS play with superior margins, ideal for WDAY analysis in stock picks targeting stable cloud HCM solutions.
Elevated quality rating and FCF strength suggest resilience, differentiating it among undervalued growth stocks.
Key Catalysts
- Elite Quality rating of 10.0 indicates strong business moat
- High Gross margin of 77.5% drives profitability
- Solid FCF margin of 28.0% funds R&D
- Manageable Total Debt to Equity at 42.7%
Risk Factors
- Low Revenue growth of 0.3% raises expansion concerns
- Significant 1Y Return decline of -32.5% reflects volatility
Stock #3: Tyler Technologies, Inc. (TYL)
| Metric | Value |
|---|---|
| Market Cap | $15.9B |
| Quality Rating | 6.2 |
| Intrinsic Value | $539.9 |
| 1Y Return | -38.3% |
| Revenue | $2,298.3M |
| Free Cash Flow | $618.9M |
| Revenue Growth | 10.6% |
| FCF margin | 26.9% |
| Gross margin | 44.8% |
| ROIC | 7.0% |
| Total Debt to Equity | 18.7% |
Investment Thesis
Tyler Technologies, Inc. (TYL) features a Market Cap of $15.9B, Quality rating of 6.2, and high Intrinsic value of $539.9, amid 1Y Return of -38.3%. Financials show Revenue of $2,298.3M, Free Cash Flow of $618.9M, Revenue growth of 10.6%, FCF margin of 26.9%, Gross margin of 44.8%, ROIC of 7.0%, and low Total Debt to Equity of 18.7%. TYL's niche in public sector software positions it for steady demand in TYL analysis as part of best value stocks.
Balanced growth and low debt enhance its appeal in government tech exposure.
Key Catalysts
- Strong Intrinsic value upside at $539.9
- Consistent Revenue growth of 10.6%
- Attractive FCF margin of 26.9%
- Low Total Debt to Equity of 18.7%
Risk Factors
- Lower Quality rating of 6.2 vs. peers
- Sharp 1Y Return drop of -38.3%
Stock #4: Pinterest, Inc. (PINS)
| Metric | Value |
|---|---|
| Market Cap | $14.9B |
| Quality Rating | 7.0 |
| Intrinsic Value | $27.6 |
| 1Y Return | -32.8% |
| Revenue | $4,056.6M |
| Free Cash Flow | $1,121.7M |
| Revenue Growth | 16.8% |
| FCF margin | 27.7% |
| Gross margin | 80.0% |
| ROIC | 208.1% |
| Total Debt to Equity | 4.3% |
Investment Thesis
Pinterest, Inc. (PINS) has a Market Cap of $14.9B, Quality rating of 7.0, Intrinsic value of $27.6, and 1Y Return of -32.8%. Metrics include Revenue of $4,056.6M, Free Cash Flow of $1,121.7M, Revenue growth of 16.8%, FCF margin of 27.7%, standout Gross margin of 80.0%, exceptional ROIC of 208.1%, and minimal Total Debt to Equity of 4.3%. PINS excels in visual discovery monetization, making it a compelling PINS analysis for ad-tech investment opportunities.
High ROIC signals capital efficiency in user engagement growth.
Key Catalysts
- Outstanding ROIC of 208.1%
- Robust Revenue growth at 16.8%
- Excellent Gross margin of 80.0%
- Near-zero Total Debt to Equity of 4.3%
Risk Factors
- 1Y Return decline of -32.8%
- Ad market cyclicality
Stock #5: GoDaddy Inc. (GDDY)
| Metric | Value |
|---|---|
| Market Cap | $13.6B |
| Quality Rating | 7.0 |
| Intrinsic Value | $183.0 |
| 1Y Return | -52.9% |
| Revenue | $4,869.8M |
| Free Cash Flow | $1,537.9M |
| Revenue Growth | 8.8% |
| FCF margin | 31.6% |
| Gross margin | 61.5% |
| ROIC | 19.4% |
| Total Debt to Equity | 4,193.5% |
Investment Thesis
GoDaddy Inc. (GDDY) boasts Market Cap $13.6B, Quality rating 7.0, Intrinsic value $183.0, despite 1Y Return -52.9%. Data reveals Revenue $4,869.8M, Free Cash Flow $1,537.9M, Revenue growth 8.8%, FCF margin 31.6%, Gross margin 61.5%, ROIC 19.4%, and high Total Debt to Equity 4,193.5%. GDDY's domain and hosting dominance supports GDDY analysis in digital infrastructure stock watchlist.
High FCF margins offset debt in this ecosystem play.
Key Catalysts
- Top FCF margin of 31.6%
- Solid ROIC at 19.4%
- Steady Revenue growth 8.8%
- Strong Gross margin 61.5%
Risk Factors
- Elevated Total Debt to Equity 4,193.5%
- Steep 1Y Return -52.9%
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Stock #6: Chewy, Inc. (CHWY)
| Metric | Value |
|---|---|
| Market Cap | $12.1B |
| Quality Rating | 6.8 |
| Intrinsic Value | $54.1 |
| 1Y Return | -26.9% |
| Revenue | $12.6B |
| Free Cash Flow | $487.0M |
| Revenue Growth | 9.8% |
| FCF margin | 3.9% |
| Gross margin | 29.6% |
| ROIC | 20.5% |
| Total Debt to Equity | 111.4% |
Investment Thesis
Chewy, Inc. (CHWY) shows Market Cap $12.1B, Quality rating 6.8, Intrinsic value $54.1, 1Y Return -26.9%. Fundamentals: Revenue $12.6B, Free Cash Flow $487.0M, Revenue growth 9.8%, FCF margin 3.9%, Gross margin 29.6%, ROIC 20.5%, Total Debt to Equity 111.4%. CHWY's pet e-commerce scale aids CHWY analysis among undervalued stocks to buy.
ROIC strength highlights operational leverage potential.
Key Catalysts
- High Revenue scale at $12.6B
- Good ROIC 20.5%
- Revenue growth 9.8% in e-commerce
- Improving FCF trajectory
Risk Factors
- Low FCF margin 3.9%
- High Total Debt to Equity 111.4%
Stock #7: Nutanix, Inc. (NTNX)
| Metric | Value |
|---|---|
| Market Cap | $10.7B |
| Quality Rating | 7.1 |
| Intrinsic Value | $84.6 |
| 1Y Return | -42.2% |
| Revenue | $2,617.5M |
| Free Cash Flow | $772.8M |
| Revenue Growth | 17.4% |
| FCF margin | 29.5% |
| Gross margin | 87.0% |
| ROIC | 24.5% |
| Total Debt to Equity | (221.4%) |
Investment Thesis
Nutanix, Inc. (NTNX) with Market Cap $10.7B, Quality rating 7.1, Intrinsic value $84.6, 1Y Return -42.2%. Includes Revenue $2,617.5M, Free Cash Flow $772.8M, Revenue growth 17.4%, FCF margin 29.5%, Gross margin 87.0%, ROIC 24.5%, Total Debt to Equity 221.4%. Hyperconverged infrastructure drives NTNX analysis in cloud stock picks.
Negative debt and high margins signal cleanup potential.
Key Catalysts
- Leading Gross margin 87.0%
- Fast Revenue growth 17.4%
- Strong FCF margin 29.5%
- Negative Total Debt to Equity balance sheet strength
Risk Factors
- 1Y Return -42.2% volatility
- Competitive cloud pressures
Stock #8: DocuSign, Inc. (DOCU)
| Metric | Value |
|---|---|
| Market Cap | $10.6B |
| Quality Rating | 6.7 |
| Intrinsic Value | $115.7 |
| 1Y Return | -45.2% |
| Revenue | $3,158.9M |
| Free Cash Flow | $987.9M |
| Revenue Growth | 8.4% |
| FCF margin | 31.3% |
| Gross margin | 79.3% |
| ROIC | 19.6% |
| Total Debt to Equity | 14.4% |
Investment Thesis
DocuSign, Inc. (DOCU) at Market Cap $10.6B, Quality rating 6.7, Intrinsic value $115.7, 1Y Return -45.2%. Metrics: Revenue $3,158.9M, Free Cash Flow $987.9M, Revenue growth 8.4%, FCF margin 31.3%, Gross margin 79.3%, ROIC 19.6%, Total Debt to Equity 14.4%. E-signature leadership fits DOCU analysis for workflow automation.
High FCF supports expansion beyond pandemic highs.
Key Catalysts
- Excellent FCF margin 31.3%
- High Gross margin 79.3%
- Solid ROIC 19.6%
- Low Total Debt to Equity 14.4%
Risk Factors
- Post-pandemic 1Y Return -45.2%
- Growth moderation at 8.4%
Stock #9: Morningstar, Inc. (MORN)
| Metric | Value |
|---|---|
| Market Cap | $8,517.1M |
| Quality Rating | 6.3 |
| Intrinsic Value | $246.1 |
| 1Y Return | -38.6% |
| Revenue | $2,395.4M |
| Free Cash Flow | $394.1M |
| Revenue Growth | 7.8% |
| FCF margin | 16.5% |
| Gross margin | 60.9% |
| ROIC | 15.4% |
| Total Debt to Equity | 68.9% |
Investment Thesis
Morningstar, Inc. (MORN) holds Market Cap $8,517.1M, Quality rating 6.3, Intrinsic value $246.1, 1Y Return -38.6%. Data: Revenue $2,395.4M, Free Cash Flow $394.1M, Revenue growth 7.8%, FCF margin 16.5%, Gross margin 60.9%, ROIC 15.4%, Total Debt to Equity 68.9%. Data and research moat aids MORN analysis in financial tools.
Steady metrics suit defensive growth positioning.
Key Catalysts
- Attractive Intrinsic value $246.1
- Reliable Gross margin 60.9%
- Positive ROIC 15.4%
- Consistent Revenue growth 7.8%
Risk Factors
- Moderate Quality rating 6.3
- 1Y Return -38.6%
Stock #10: Paycom Software, Inc. (PAYC)
| Metric | Value |
|---|---|
| Market Cap | $7,524.1M |
| Quality Rating | 7.0 |
| Intrinsic Value | $209.1 |
| 1Y Return | -34.2% |
| Revenue | $2,001.2M |
| Free Cash Flow | $392.5M |
| Revenue Growth | 9.7% |
| FCF margin | 19.6% |
| Gross margin | 81.8% |
| ROIC | 48.0% |
| Total Debt to Equity | 4.9% |
Investment Thesis
Paycom Software, Inc. (PAYC) with Market Cap $7,524.1M, Quality rating 7.0, Intrinsic value $209.1, 1Y Return -34.2%. Includes Revenue $2,001.2M, Free Cash Flow $392.5M, Revenue growth 9.7%, FCF margin 19.6%, Gross margin 81.8%, high ROIC 48.0%, low Total Debt to Equity 4.9%. HCM software efficiency boosts PAYC analysis in investment ideas.
Superior ROIC and margins highlight quality.
Key Catalysts
- Impressive ROIC 48.0%
- High Gross margin 81.8%
- Good Revenue growth 9.7%
- Minimal Total Debt to Equity 4.9%
Risk Factors
- 1Y Return -34.2%
- Competition in payroll tech
Portfolio Diversification Insights
These 10 best stock picks cluster heavily in technology and software sectors (e.g., NFLX in streaming, WDAY/PAYC in HCM, NTNX in infrastructure, PINS in social/ad-tech), with CHWY adding consumer/e-commerce diversification. Sector allocation: ~80% tech/software, 10% e-commerce, 10% data services. Complementary strengths—high ROIC in PINS/PAYC/NTNX pairs with scale in NFLX/GDDY—reduce single-stock risk. WDAY's perfect quality rating balances TYL/MORN's steadier profiles, creating a stock watchlist for growth-value blend. Cross-references like shared high gross margins (>70% in WDAY/PINS/DOCU/PAYC) enhance portfolio resilience in undervalued growth stocks.
Market Timing & Entry Strategies
Consider positions during sustained 52-week low trading, monitoring for revenue growth acceleration (e.g., >10% like NTNX/PINS) or FCF margin expansion. Dollar-cost average into high-quality names like WDAY (10.0 rating) on dips below intrinsic value. Track sector rotations toward tech recovery, using ROIC >20% (NFLX/PINS/GDDY/CHWY/NTNX/DOCU/PAYC) as entry signals. Pair with broader market stabilization for best value stocks timing, focusing on debt-light profiles (PINS/PAYC) first.
Explore More Investment Opportunities
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FAQ Section
How were these stocks selected?
These 10 best undervalued growth stocks were chosen using ValueSense criteria: intrinsic value upside, quality ratings 6.2-10.0, positive FCF, revenue growth, high margins, and ROIC, focusing on those at 52-week lows for investment opportunities.
What's the best stock from this list?
Workday (WDAY) leads with a perfect Quality rating of 10.0, high Gross margin 77.5%, and Intrinsic value $217.7, though all offer unique stock picks merits like PINS's 208.1% ROIC.
Should I buy all these stocks or diversify?
Diversification across tech subsectors (SaaS, ad-tech, infrastructure) is key; allocate based on risk tolerance, favoring low-debt like PINS (4.3%) alongside scale plays like NFLX for balanced stock watchlist.
What are the biggest risks with these picks?
Common risks include negative 1Y Returns (-14.2% to -52.9%), sector volatility, high debt in GDDY (4,193.5%) and CHWY (111.4%), and slowing growth like WDAY's 0.3%.
When is the best time to invest in these stocks?
Optimal entry near intrinsic values during market dips, post-earnings confirming revenue/FCF trends (e.g., NTNX 17.4% growth), aligning with tech recovery for top stocks to buy now.