12 Most Undervalued Retail Stocks To Buy According to Analysts

1. Sendas Distribuidora SA (NYSE:ASAI)

Forward P/E: 12.59

Analyst Upside: 60.45%

Sendas Distribuidora SA (NYSE:ASAI), more commonly known as Assai Atacadista, is a retailer based in Brazil that operates in the foot distribution sector. Its operations are divided into two operational segments: Retail and Cash & Carry. The retail segment operates a network of supermarkets, hypermarkets, and convenience shops under various brands in South American countries. Its Cash & Carry segment offers food, bazaar items, and various other products to wholesale customers in Brazil.

Due to its efficient business model, the company has significant capacity for stability in expenses, cash generation, and margin maintenance. Analysts are bullish on the stock because of its strong market presence, as it continues to be assertive and accepted in the markets it is present in.

Sendas Distribuidora SA (NYSE:ASAI) is focusing on store growth, reaching 21 openings in the last 12 months, as per its fiscal Q3 2024 earnings report. This translates to a net addition of 8% in the company’s total sales area, along with four new stores that it delivered in fiscal Q3 2024. Since the company is undertaking actual modifications in its business model instead of simply expanding its operations, it boasts an innovative performance model that allows increased penetration in all different social levels. This also makes it one of the unique business models in Brazil, as it serves consumers from all social levels in the country.

The company holds a history of supporting its growth by its own cash generation ever since its inception in 2011. It has managed to sustain growth in investments and projects without receiving investments, which highlights its solid operational model.

Overall, ASAI ranks first among the 12 most undervalued retail stocks to buy according to analysts. While we acknowledge the potential of retail stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ASAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.