In this article, we will look at the 12 High Growth Low PE Stocks to Buy.
Amid the artificial intelligence frenzy, stock valuations have been overlooked. Over the past two years, investors have shunned value-oriented names in favor of high-flying technology names. That has left investment portfolios susceptible to heightened volatility should there be a deep correction as investors react to premium valuations.
While the dust appears to have settled in the aftermath of the massive pullback following the revelation that DeepSeek might be way ahead of most American AI models, Niles, founder and portfolio manager at Niles Investment Management, believes investors should be highly cautious. “I think investors should be cautious about assuming that this is the bottom,” Niles told CNBC’s Sri Jegarath and Chery Kang on Squawkbox Asia.
It’s no secret that most stocks are trading at premium valuations in response to the AI-driven rally. Consequently, the focus is increasingly on high-growth stocks trading at discounted valuations characterized by low price-to-earnings multiple. Likewise, some of the best stocks in this category are backed by solid underlying fundamentals such as robust revenue growth.
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High-growth stocks are mostly companies well-positioned to grow their profits more quickly than the typical companies in their industry. However, growth investing is more than just choosing stocks. The focus should always be on companies that have frequently created novel products or services that are expanding their market share, breaking into new markets, or even starting whole new industries.
Similarly, companies that can grow faster than average for extended periods of time and provide shareholders with sizable returns are typically rewarded by the market. Additionally, the potential returns increase with their rate of growth.
Growth stocks are impacted by high inflation because it lowers the projected future value of their earnings. Supply chain limitations, also impact some company’s capacity to grow and other macroeconomic factors slow down the economy as a whole. However, when growth stock prices are low, downturns can present a buying opportunity for long-term investors.
While the focus for the longest time has been on tech giants benefiting from the AI trade, Tom Lee, head of research at Fundstrat Global Advisors, believes investors should consider diversifying their portfolios. Given that valuations in the tech industry appear overblown, financials offer a way out at highly discounted valuations backed by solid underlying fundamentals.
“I think financials to me represent a pretty good fundamental case of change this year because we have a new administration, a Fed that is dovish, yields that aren’t painful for banks — and a time when it could lead to upside for capital markets activity, and multiples are low,” Lee said
Even as investors debate whether the DeepSeek correction amounted to an overreaction focusing on high growth, low PE stocks appear to be a promising play given the heightened volatility in the market.
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Our Methodology
To make the list of 12 high growth low PE stocks to buy, we scanned US stock markets using finviz, focusing on high growth stocks with robust revenue growth metrics (more than 25%). We then settled on the 12 stocks that appear undervalued owing to a low price-to-earnings multiple of less than 15 (as of January 29). Finally, we ranked the stocks in ascending order based on hedge funds stakes in them.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Vista Energy SAB de CV (NYSE:VIST)
5-Year Revenue CAGR: 28.52%
Number of Hedge Fund Holders: 21
Forward P/E as of January 29: 8.47
Vista Energy SAB de CV (NYSE:VIST), through its subsidiaries, engages in the exploration and production of oil and gas in Latin America. It’s been one of the best-performing oil and gas stocks, rallying over 600% over the past five years. The rally has come on the company benefiting from oil prices finding support above the $70 barrel levels, fuelling a 28.52% CAGR revenue growth.
Additionally, Vista Energy SAB de CV (NYSE:VIST) has benefited from strong operational growth and increased oil production. Consequently, its revenue was up by 53% in the third quarter, benefiting from a 53% increase in oil production. Its EBITDA also rose 37%, affirming operational efficiency.
Increased investments in the Vaca Muerta position the company to continue benefiting from soaring oil demand. Vista Energy SAB de CV (NYSE:VIST) has already announced plans to spend $1.1 billion to unlock more oil under the shale deposit in Argentina. Additionally, financing strategies, including bond issuance, underline long-term growth potential and financial stability.
11. StoneCo Ltd. (NASDAQ:STNE)
5-Year Revenue CAGR: 41.67%
Number of Hedge Fund Holders: 22
Forward P/E as of January 29: 7.36
StoneCo Ltd. (NASDAQ:STNE) provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. While the company was under immense pressure in 2024, it has started showing signs of improvement.
With a solid staff and well-defined operational procedures, its credit business is in a strong position. The company’s operational strength is demonstrated by its 13.9% annual revenue growth and profitability, with earnings per share of $1.18. StoneCo Ltd.’s (NASDAQ:STNE) daily amortization model is one of the characteristics that might set it apart in the market and result in lower default rates.
The 2020 Linx purchase by StoneCo is being scrutinized as the business evaluates bids for the division. Constellation Software of Canada and the Brazilian software company Totvs SA are among the interested parties, though Totvs has stated that it has not yet made an offer. According to reports, the tech company is financially stable, which lessens the need to sell Linx. StoneCo Ltd.’s (NASDAQ:STNE) recent approval of a share repurchase program worth up to 2 billion reads affirms financial stability.
10. Northern Oil and Gas Inc. (NYSE:NOG)
5-Year Revenue CAGR: 30.06%
Number of Hedge Fund Holders: 26
Forward P/E as of January 29: 8.47
Northern Oil and Gas Inc. (NYSE:NOG) is an independent energy company that engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties. The company’s competitive edge as one of the best high growth low PE stocks to buy stems from its unique business model. Unlike other oil and gas companies, it acquires minority stakes in leading operators’ premium oil and gas assets.
In return, Northern Oil and Gas Inc. (NYSE:NOG) leaves operations to other companies, avoiding excessive operational costs. Similarly, the company generates significant returns given the low operating costs. Over the past year, the company has focused on deploying capital to high-potential drilling assets, allowing it to enjoy a 30% compound annual growth rate on revenues.
Northern Oil and Gas Inc. (NYSE:NOG) has acquired nearly $5 billion worth of land and currently owns about 300,000 acres. It has also achieved industry-leading operational efficiency in spite of its substantial portfolio. Last year, it strengthened its portfolio of oil and gas-generating assets with the acquisition of XCL Resources for $519 million in partnership with SM Energy Company. Northern Oil and Gas’s strategic partnership aims to enhance its natural gas exposure and operational footprint in a key energy-producing region. Cash flow from operations was up by 9% in the third quarter of last year to $385.8 million. The company generated a record $177.1 million of free cash flow, allowing it to reward shareholders with a 4.43% dividend yield.
9. Axcelis Technologies, Inc. (NASDAQ:ACLS)
5-Year Revenue CAGR: 25.84%
Number of Hedge Fund Holders: 29
Forward P/E as of January 29: 14.18
Axcelis Technologies, Inc. (NASDAQ:ACLS) is a semiconductor equipment & materials company that designs, manufactures, and services implantation and other processing equipment. The semiconductor company has faced significant headwinds over the past year amid supply chain issues and potential cooling in demand. Nevertheless, the company has remained resilient on the operational front, as depicted by its solid financial results.
For starters, it delivered solid third-quarter results with revenues of $257 million and earnings per share of $1.49 that beat analysts’ projections. The strong smartphone image sensor market was the main driver of this performance. However, the company reduced its 2024 backlog to $879 million after Q3 bookings of $84 million fell short of projections. Axcelis Technologies, Inc. (NASDAQ:ACLS) is optimistic about the memory and silicon carbide market growth, even though some industries have experienced a downturn.
Axcelis Technologies, Inc. (NASDAQ:ACLS) is optimistic about a cyclical recovery in the advanced logic and memory markets as well as continuous cash generation, notwithstanding potential obstacles in 2025. However, the company anticipates lower revenues in the first quarter of 2025 because of the softness in the power and mature sectors. These latest events imply that Axcelis is strategically concentrating on promising industries while managing market changes.
8. Matador Resources Company (NYSE:MTDR)
5-Year Revenue CAGR: 29.04%
Number of Hedge Fund Holders: 30
Forward P/E as of January 29: 7.70
Matador Resources Company (NYSE:MTDR) is an independent energy company that explores, develops, produces, and acquires oil and natural gas resources in the United States. It stands out as one of the best high-growth low PE stocks to buy, having succeeded in growing its revenue at a compound annual growth rate of 29% over the past five years.
Likewise, Matador Resources Company (NYSE:MTDR) plans to accelerate production in 2025, targeting 200,000 barrels of oil equivalent per day, as it looks to take advantage of oil price funding support above the $70 a barrel level. It plans to operate up to nine rigs throughout the year. The company will likely see earnings growth of almost 16% and 20% in 2024 and 2025, respectively.
Amid the increased production, analysts expect Matador Resources Company (NYSE:MTDR) to generate a free cash flow of $1.029 billion, reflecting a 13% yield. The fact that both cash flow and profits support Matador Resources’ dividend yield of 1.64% is encouraging because it typically indicates that the dividend is sustainable.
7. VICI Properties Inc. (NYSE:VICI)
5-Year Revenue CAGR: 33.92%
Number of Hedge Fund Holders: 35
Forward P/E as of January 29: 11.76
VICI Properties Inc. (NYSE:VICI) operates as a real estate investment trust. It owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas on the Las Vegas Strip. Thanks to this specialization, the company has established solid connections with well-established operators and gained extensive knowledge of its target market.
According to analysts, VICI Properties Inc.’s (NYSE:VICI) ability to obtain advantageous investment terms and sustain high occupancy rates is facilitated by the lack of competition in the casino real estate market. The company benefits from a 100% occupancy rate because tenants have limited options to move locations due to the high barriers to entry created by the gaming regulatory environment. Additionally, it has a wide range of revenue sources, such as hotel rooms, convention and meeting spaces, gaming areas, entertainment venues, and retail stores.
VICI Properties Inc. (NYSE:VICI) revised its full-year adjusted funds from operations (AFFO) guidance to between $2.36 billion and $2.37 billion and reported a 4.9% increase in AFFO per share to $0.57. The company is well-positioned for future expansion with multiple purchase rights built into its investments and prospective growth prospects in New York and abroad. The business is well-positioned in the market thanks to its aggressive growth strategy and stable lease income.
6. ChampionX Corporation (NASDAQ:CHX)
5-Year Revenue CAGR: 25.10%
Number of Hedge Fund Holders: 40
Forward P/E as of January 29: 13.77
ChampionX Corporation (NASDAQ:CHX) provides chemistry solutions, artificial lift systems, and engineered equipment and technologies to oil and gas companies worldwide. It is one of the stocks that have been on a roll in the aftermath of President Donald Trump announcing plans to enhance oil and gas production. The policy change is expected to fuel demand for the company’s oil and equipment services, which affirms why it is one of the growing low PE stocks to buy.
ChampionX Corporation (NASDAQ:CHX) has already strengthened its arsenal of oil and gas equipment with the acquisition of RMSpumptools Limited. With the acquisition, it gains access to an arsenal of advanced mechanical and electrical solutions for artificial lift applications. This acquisition should open up growth opportunities for the company in the international markets of the Middle East and Latin America.
For the third quarter that ended, ChampionX Corporation’s (NASDAQ:CHX) total revenue stood at $906.53 million, as the Production & Automation Technologies segment reported revenue of $275.70 million, indicating a 7.6% growth from the prior-year period. Its gross profit increased 2% year-over-year to $297.77 million. The impressive results underscore underlying growth expected to continue as the new US administration pushes for more drilling.
5. Crocs, Inc. (NASDAQ:CROX)
5-Year Revenue CAGR: 28.04%
Number of Hedge Fund Holders: 42
Forward P/E as of January 29: 7.53
Crocs, Inc. (NASDAQ:CROX) is a footwear and accessories company that designs, manufactures and sells casual lifestyle footwear and accessories for men, women, and children under Crocs and HEYDUDE Brand. While the stock was flat last year, it is a high growth low P/E stock to buy, going by the strong demand for its products.
While China has been a difficult market for many brands, Crocs, Inc. (NASDAQ:CROX) is finding its way there. Its Crocs brand saw more than 20% growth last year, backed by robust growth in Australia, France and Germany. Likewise, management expects China and India to be growth drivers in 2025, which should support the 28.04% compound annual growth rate in revenue over the past five years.
The robust growth around the Crocs, Inc. (NASDAQ:CROX) product line was evident, with management projecting 7% to 9% revenue growth. The growth should be more than enough to offset any slowdown in the HeyDudes product line that’s been struggling since its acquisition for $2.5 billion. While the company expects to generate earnings of between $12.82 and $12.90, the stock still sells at a discount with a price-to-earnings multiple of 8.36.
4. First Citizens BancShares, Inc. (NASDAQ:FCNCA)
5-Year Revenue CAGR: 40.63%
Number of Hedge Fund Holders: 46
Forward P/E as of January 29: 13.48
First Citizens BancShares, Inc. (NASDAQ:FCNCA) is a financial services company that provides retail and commercial banking services to individuals, businesses, and professionals. The company’s edge as a growth low PE stock to buy stems from robust financial results complemented by strategic initiatives in risk management. On January 27th, the company delivered impressive fourth-quarter and full-year results that benefited from aggressive risk management and technology investments.
First Citizens BancShares, Inc. (NASDAQ:FCNCA) delivered adjusted earnings per share of $45.87 against the $39.13 expected for the year. Revenues were up 23% year over year to $9.33 billion. The bank’s competitive position in innovation and strategic investments drove the impressive results. The business continued to prioritize efficiency and cost control while maintaining a robust pipeline in global fund banking. The dedication to shareholder value is demonstrated by the $969.4 million repurchase of 3.61% of Class A common shares.
First Citizens BancShares, Inc. (NASDAQ:FCNCA) expects deposit growth to reach $150 billion to $153 billion and loan growth to be between $138 billion and $140 billion. The business is getting ready for rate cuts by the Federal Reserve, which might have an effect on margin and net interest income by the second half of 2025.
3. Civitas Resources Inc. (NYSE:CIVI)
5-Year Revenue CAGR: 75.85%
Number of Hedge Fund Holders: 48
Forward P/E as of January 29: 5.03
Civitas Resources Inc. (NYSE:CIVI) is an exploration and Production Company that explores, develops, and produces oil and natural gas in the Rocky Mountain region of the Denver-Julesburg Basin of Colorado. While the stock was down by about 23% in 2024, it has started 2025 on a roll amid a spike in commodity prices.
Civitas Resources Inc. (NYSE:CIVI) has made a name for itself as a major producer in the Permian and DJ Basin, two of the most productive oil-producing areas in the US. The company’s strategic focus on these areas has positioned it to capitalize on the strong demand for domestic energy resources, as evidenced by its impressive gross profit margin of 74.19% and revenue growth of 59.18% over the last 12 months.
Significant gains in production efficiency and cost reduction should result from Civitas’ emphasis on operational enhancements and creative well designs. Civitas Resources Inc. (NYSE:CIVI) is able to keep a healthy balance sheet, invest in expansion prospects, and give money back to shareholders thanks to the high FCF yield. The company may be able to fund organic growth initiatives, pursue accretive acquisitions, or raise dividend payments in the future thanks to its strong financial position, all of which could help create long-term shareholder value.
2. Permian Resources Corporation (NYSE:PR)
5-Year Revenue CAGR: 39.60%
Number of Hedge Fund Holders: 56
Forward P/E as of January 29: 9.76
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company that focuses on the development of crude oil and related liquids-rich natural gas reserves. The company’s assets primarily focus on the Delaware Basin. As the overall oil and gas sector remained under pressure in 2024, the stock rallied by 10.15%. The impressive performance underscores the company’s strong operational and financial performance.
Permian Resources Corporation’s (NYSE:PR) edge in the oil and gas sector stems from the robustness of its operations in the Delaware basin, deemed immune to fluctuations in commodity prices. The fact that the company’s breakeven point on oil is at $30 a barrel affirms it will always generate profits even with oil plunging below the $70 a barrel level.
With a clear strategy centered on consolidation within the Delaware Basin, Permian Resources Corporation (NYSE:PR) has been among the most acquisitive companies in its industry in recent years. Management has a proven track record of successfully locating, carrying out, and integrating value-accretive acquisitions. Last year, they acquired oil-generating assets from Occidental Petroleum Corporation for $817.5 million. It has also enhanced its leading position in the Delaware Basin and increased operating size and scale with the acquisition of Earthstone Energy, Inc.
1. PDD Holdings Inc. (NASDAQ:PDD)
5-Year Revenue CAGR: 71.61%
Number of Hedge Fund Holders: 78
Forward P/E as of January 29: 8.70
PDD Holdings Inc. (NASDAQ:PDD) is an internet retail company that owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, and electronic appliances. It stands out as a high-growth, low P/E stock to buy, given the company’s exposure to the burgeoning Chinese e-commerce landscape.
PDD Holdings Inc. (NASDAQ:PDD) has succeeded in carving a niche as a discount marketplace for shoppers in low-tier cities in China. Consequently, it is increasingly capitalizing on the growing demand for fresh farm produce through its online agricultural platform. Over the past five years, its revenue has grown at a compound annual growth rate of 71%, much higher than the 20% growth for Alibaba and 19% for JD.com, its biggest competitor.
Analysts expect PDD Holdings Inc. (NASDAQ:PDD) to grow at a CAGR of 38% to 2026, driven by market share gains in China. Expansion into international markets through the Temu platform is expected to support and accelerate growth. Temu increasingly connects Chinese sellers and overseas buyers, allowing PDD to diversify its revenue base. The fact that antitrust authorities are not targeting the company in China affirms its long-term prospects.
As we acknowledge the growth potential of PDD Holdings Inc. (NASDAQ:PDD), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PDD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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