Value investing has produced some of the world’s most famous investing billionaires, including Warren Buffett, David Einhorn, and Seth Klarman, who built their fortunes by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. Keeping that in mind, here are two value stocks with strong fundamentals and one best left ignored.
One Value Stock to Sell:
Sprinklr (CXM)
Forward P/S Ratio: 1.6x
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE: CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Why Do We Pass on CXM?
- Products, pricing, or go-to-market strategy may need some adjustments as its 5.3% average billings growth over the last year was weak
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
At $5.62 per share, Sprinklr trades at 1.6x forward price-to-sales. To fully understand why you should be careful with CXM, check out our full research report (it’s free).
Two Value Stocks to Buy:
Instacart (CART)
Forward EV/EBITDA Ratio: 8.9x
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Should You Buy CART?
- Platform is difficult to replicate at scale and leads to a premier gross margin of 74.1%
- Healthy EBITDA margin of 28.3% shows it’s a well-run company with efficient processes, and its profits increased over the last few years as it scaled
- Free cash flow margin jumped by 12.5 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Instacart’s stock price of $47.50 implies a valuation ratio of 8.9x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Grid Dynamics (GDYN)
Forward P/E Ratio: 12.8x
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
Why Is GDYN a Top Pick?
- Market share has increased this cycle as its 15.3% annual revenue growth over the last two years was exceptional
- Earnings per share grew by 20.4% annually over the last five years, massively outpacing its peers
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Grid Dynamics is trading at $5.82 per share, or 12.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
