- Higher Treasury yields and have pressured US stocks, but the selloff is creating potential entry points among companies that are beginning to stabilize.
- InvestingPro identified 8 stocks down 30.1% to 42.5% over three months, yet showing 29.1% to 57.9% Fair Value upside and 36.6% to 127.7% analyst upside.
- The key opportunity is to distinguish genuine value from value traps by combining valuation, financial health, and analyst targets with signs of short-term recovery.
reached 4.818% in early September, their highest level since November 2023, driven by rising oil prices and uncertainty surrounding the . Higher interest rates have weighed on several U.S. stocks in recent months, creating potentially attractive entry points for investors looking for opportunities.
However, not every stock that has fallen sharply is necessarily a good buy. To distinguish genuine opportunities from stocks facing justified declines, three tools are particularly useful:
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InvestingPro’s Fair Value metric combines several recognized valuation models to assess whether a stock is undervalued or overvalued relative to its fundamentals. This helps determine whether a falling stock has simply become cheaper or whether its price is genuinely attractive relative to its earnings and outlook.
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The InvestingPro Financial Health Score, rated on a scale of 1 to 5 and based on more than 100 factors, helps identify companies with weaker finances. A stock may appear cheap while carrying excessive debt or facing tight cash flow, and this score can help filter out such potential value traps.
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The average analyst price target provides a complementary external perspective based on the views of professionals who closely follow each stock.
Of course, trying to catch a falling knife always carries risks. It is therefore also important to look for stocks that, after declining sharply over several months, are beginning to show signs of stabilization in the short term.
These US stocks combine a sharp decline, significant undervaluation, and signs of a rebound
We therefore turned to the Investing.com screener, combining these different criteria:
- Market capitalization of over $1 billion
- A decline of more than 25% over 3 months
- Positive change over 1 week
- Upside potential of more than 20% according to InvestingPro Fair Value
- Upside potential of more than 20% based on the average analyst target price
- InvestingPro Financial Health Score above 2.5/5
This research has helped us identify 8 opportunities.
Specifically, these U.S. stocks have fallen 30.1% to 42.5% over the past three months, while InvestingPro’s Fair Value suggests they are undervalued by 29.1% to 57.9%. Analyst price targets imply upside potential ranging from 36.6% to 127.7%.
Among these stocks are:
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Legence (), a provider of technical building systems, including air conditioning, process plumbing, and electromechanical systems, serving data centers, life sciences, and education. The stock has declined sharply over the past three months despite solid fundamentals. In the second quarter, revenue more than doubled year over year, rising 110.7% to $1.26 billion, while the order backlog reached $5.67 billion, driven by strong demand for AI infrastructure. Legence also raised its full-year adjusted EBITDA guidance to $565 million-$585 million. However, the market has focused on margin pressure related to the integration of Bowers. Fair Value indicates 31.6% upside, while the analyst consensus points to potential gains of 94.4%.
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AppLovin (), an AI-driven advertising platform for mobile apps that is also expanding into e-commerce, has lost more than half its value since the start of the year. The stock fell roughly 16% to 20% following its second-quarter earnings release, as adjusted EPS of $3.76, in line with expectations, was not enough to offset revenue that came in slightly below consensus and weaker-than-expected third-quarter guidance. However, the SEC’s decision to close its investigation without further action removes a significant overhang. Fair Value indicates 29.1% upside, compared with 60.7% based on the average analyst price target.
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- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
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1,200+ Financial Metrics at Your Fingertips: From debt ratios and profitability to analyst earnings revisions, you’ll have everything professional investors use to analyze stocks in one clean dashboard.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of any assets and does not constitute an offer, solicitation, recommendation, or advice to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky; therefore, any investment decision and the associated risk are the sole responsibility of the investor. Additionally, we do not provide any investment advisory services.