Data as of 2026-11-07US market
Summary
Screened 12 undervalued US stocks on November 7, 2026; CVS, ADBE, PYPL, NKE, and LEN offer the strongest fundamental resilience, margin expansion, and valuation discounts for a 6 to 18 month horizon.
Screening weights
Fundamental improvement30%
Candidate comparison
| Rank | Ticker | Sector | 3M return | Revenue YoY | OPM Δ | FCF | Score |
|---|
| 1 | CVS Health | Healthcare | -5.2% | +7.5% | +1.2%p | Positive | 9.6 |
| 2 | Adobe Inc. | Software | -19.8% | +10.6% | +1.5%p | Positive | 9.5 |
| 3 | PayPal Holdings | Fintech | -8.0% | +8.2% | +1.1%p | Positive | 9.2 |
| 4 | NIKE, Inc. | Consumer | -13.8% | +1.1% | +0.4%p | Positive | 9.0 |
| 5 | Lennar Corporation | Homebuilding | -11.2% | +7.9% | +0.2%p | Positive | 8.8 |
| 6 | Autodesk | Design Software | -3.5% | +16.0% | +2.0%p | Positive | 8.5 |
| 7 | Western Digital | Storage Hardware | -6.2% | +23.8% | +4.3%p | Positive | 8.4 |
| 8 | Lululemon Athletica | Consumer | -17.5% | +7.3% | +0.4%p | Positive | 8.2 |
| 9 | Salesforce | Cloud CRM | -9.8% | +8.4% | +3.2%p | Positive | 8.0 |
| 10 | J.B. Hunt Transport | Industrials | -11.0% | +4.8% | +0.3%p | Positive | 7.8 |
| 11 | Starbucks | Restaurants | -3.2% | +2.2% | +0.4%p | Positive | 7.5 |
| 12 | Intel | Semiconductors | -26.5% | +2.5% | -2.1%p | Negative | 5.8 |
Screened names (observations)
Observation
Major structural catalyst inflection: announced a planned tax-free separation of its retail pharmacy business on Nov 4, unlocking massive sum-of-the-parts value. CEO David Joyner will lead the retained high-margin insurance (Aetna), PBM (Caremark), and care-delivery business. Management raised full-year adjusted EPS guidance to at least $8.20 and boosted operating cash flow outlook to at least $15.5 billion, with share buybacks resuming in Q4 at ~10.5x forward P/E and a 3.0% dividend yield.
Catalysts to watch
- Tax-free corporate separation of CVS Pharmacy from insurance/services unlocking sum-of-the-parts multiple discount
- Raised FY26 adjusted EPS guidance ($8.20+) and operating cash flow guidance ($15.5B+)
- Resumption of open-market share repurchases in Q4
Risks
- Separation execution and regulatory timeline risks
- Short-term medical cost utilization volatility
Framework exit signals
- MBR exceeds 89.5% for two consecutive quarters
- Cancellation of planned corporate separation
Metrics to watch
- Health Care Benefits MBR
- Annual operating cash flows
- Separation milestone timeline
Observation
Exceptional valuation and cash-flow disconnect at $239.30 multi-year lows, down 46% off peak following broader tech sector selloffs. Trades at an EV/FCF of ~9.0x and a free cash flow yield of ~11.0% (lower than 99% of its 10-year historical valuation range). Generates $8B+ in annual free cash flow ($2.2B+ per quarter) with 46% Non-GAAP operating margin and an active $25B share repurchase authorization retiring 29M shares YoY.
Catalysts to watch
- Commercial enterprise scaling of Firefly video models and GenStudio post-Adobe MAX
- Oversold technical mean-reversion toward 20-day moving average ahead of Dec 9 earnings
- Aggressive multi-billion dollar open-market share repurchases
Risks
- Generative AI design pricing competition
- Enterprise creative sales cycle elongation
Framework exit signals
- Digital Media net new ARR growth falls below +8% YoY
- GAAP operating margin contracts below 32%
Metrics to watch
- Digital Media net new ARR
- Enterprise GenStudio customer adoption count
Observation
Sustained post-earnings momentum following Q3 beat: Non-GAAP EPS reached $1.45 (beating estimates of $1.34) and full-year EPS guidance raised to ~$5.60. Trading at an attractive valuation (~11.5x forward P/E) heading into the holiday shopping season with Fastlane guest checkout conversion lifting checkout conversions by 80% and aggressive share repurchases retiring >7% of the float annually.
Catalysts to watch
- Fastlane enterprise scaling across Shopify and major global merchant networks during holiday shopping season
- Venmo monetization expansion via debit and merchant pay
- Accelerating EPS accretion from aggressive share retirement
Risks
- Competition from Stripe and Apple Pay
- Macro e-commerce consumer spending softness
Framework exit signals
- TMD dollar growth turns negative YoY
- Non-GAAP OPM falls below 16.5%
Metrics to watch
- TMD growth YoY
- Active accounts transaction volume
Observation
High-conviction turnaround setup with Elliott Hill in his third week as CEO executing strategic product and wholesale reboot. Trading at a multi-decade low multiple (~18x forward P/E, -60% off peak), Nike cleared negative guidance overhang in Q1. Re-engagement with wholesale retail partners (Foot Locker, running specialty doors) and $3.8B in annual FCF provide a resilient floor.
Catalysts to watch
- Elliott Hill driving strategic realignment to core sport innovation and wholesale shelf-space recovery
- Restoration of wholesale retail partner shelf-space across Foot Locker and specialty running doors
- Inventory normalization paving the path for gross margin recovery in 2027
Risks
- Greater China consumer spending recovery friction
- Category competition from On and Hoka in performance running
Framework exit signals
- North American wholesale order book contracts >8% YoY
- Gross margin drops below 42.0%
Metrics to watch
- Wholesale vs Direct-to-Consumer order velocity
- Gross margin trajectory (%p)
Observation
Deep value dislocation at ~9.2x P/E with zero net homebuilding debt and $3.5B+ in cash reserves. Benefiting from the Federal Reserve 25 bps rate cut on Nov 5 and secular structural US housing shortages, Lennar's disciplined land-light execution and targeted mortgage rate buydowns provide defensive downside safety.
Catalysts to watch
- Post-FOMC rate cut easing buyer mortgage burden into year-end
- Consistent $250M quarterly share repurchase program
- Resilient order backlogs supported by land-light balance sheet
Risks
- Resurgent Treasury yield volatility delaying winter homebuyer traffic
- Gross margin pressure from financing incentives
Framework exit signals
- Homebuilding gross margin drops below 20.0%
- Quarterly net deliveries fall >10% YoY
Metrics to watch
- Homebuilding gross margin
- Quarterly new orders count
AlphaSignal Research: Top 5 Undervalued US Common Stocks (Nov 7, 2026)
1. Executive Summary
Following the Federal Reserve 25 bps rate cut on November 5 and major post-earnings corporate restructurings, institutional capital is aggressively rotating into high-quality, cash-generative leaders trading at steep historical multiple discounts. By screening 12 US common stocks characterized by lagging 3-month price returns despite expanding quarterly operating profitability, steady revenue growth, and robust free cash flow, we finalized the Top 5 Undervalued US Stocks offering asymmetric risk/reward over a 6 to 18 month horizon.
2. Candidate Comparison Table
- CVS (Score: 9.6) | Healthcare | 3M Return: -5.2% | Rev Growth: +7.5% | OPM Change: +1.2%p | FCF: Positive
- ADBE (Score: 9.5) | Software | 3M Return: -19.8% | Rev Growth: +10.6% | OPM Change: +1.5%p | FCF: Positive
- PYPL (Score: 9.2) | FinTech | 3M Return: -8.0% | Rev Growth: +8.2% | OPM Change: +1.1%p | FCF: Positive
- NKE (Score: 9.0) | Consumer | 3M Return: -13.8% | Rev Growth: +1.1% | OPM Change: +0.4%p | FCF: Positive
- LEN (Score: 8.8) | Homebuilding | 3M Return: -11.2% | Rev Growth: +7.9% | OPM Change: +0.2%p | FCF: Positive
- ADSK (Score: 8.5) | 7. WDC (Score: 8.4) | 8. LULU (Score: 8.2) | 9. CRM (Score: 8.0) | 10. JBHT (Score: 7.8) | 11. SBUX (Score: 7.5) | 12. INTC (Score: 5.8)
3. Top 5 Detailed Breakdown
- CVS (9.6): Major restructuring catalyst; announced planned tax-free spin-off of retail pharmacy, raised FY26 EPS guidance to $8.20+ and CFFO to $15.5B+, buybacks resume in Q4 at ~10.5x P/E and 3.0% yield.
- ADBE (9.5): Historic cash-flow dislocation at $239.30 multi-year lows (EV/FCF ~9.0x, FCF yield ~11.0%); generates $8B+ annual FCF ($2.2B+ quarterly) with 46% Non-GAAP OPM and active $25B buybacks retiring 29M shares YoY.
- PYPL (9.2): Strong Q3 earnings beat ($1.45 vs $1.34 consensus), FY EPS guidance raised to ~$5.60; trading at ~11.5x forward P/E with Fastlane conversion lift 80% and >7% float retired annually via buybacks.
- NKE (9.0): Multi-decade valuation low (~18x P/E, -60% off peak); Elliott Hill leading core sport innovation and wholesale shelf-space recovery, backed by $3.8B in annual FCF.
- LEN (8.8): P/E ~9.2x with zero net homebuilding debt and $3.5B+ cash reserves; Fed 25 bps rate cut tailwinds and chronic US housing shortages provide strong downside floor.
4. Conclusion
- Highest Conviction & SOTP Catalyst: CVS
- Deepest Cash-Flow Dislocation: ADBE
- Best Post-Earnings Compounder: PYPL
- Best Turnaround Catalyst: NKE
- Best Balance Sheet & Value: LEN
- Watchlist: ADSK, WDC, LULU, CRM