It may seem apparent to point out that discovering equities that are undervalued — that is, stocks that are a strong buy with good fundamentals, that the market isn’t fully recognizing right now — is a vital element of the investment game.

Fortunately for investors, considering the massive carnage in 2022, there are still many companies trading at comparatively low prices.

Indeed, even after the strong rallies earlier in the year, there are dozens of stocks out there that have done well recently, but are still down heavily over the past year, and for whom analysts predict to have more upside.

We found two tickers that provide exactly that. They have strong recent performance, however, when zoomed out a little further, it still looks fairly cheap. Even better, Wall Street analysts see both as solid buys with significant upward potential. Let’s find out why.

RumbleON, Inc. (RMBL)

RumbleOn, the largest reseller of power sports vehicles in the United States, is the first cheap-looking stock we’ll look at.

The company collects and distributes used vehicles using cutting-edge technology and provides dealers with technical solutions, such as virtual inventory and a 24/7 sales platform.

Powersports (including motorcycles), Automotive (cars and trucks), and Vehicle Logistics & Transportation are the three sections of the store (car transport services).

RumbleON’s Q4 22 results are expected next month, but a glance back at its Q3 performance can be instructive.

Revenue increased 112.6% year on year to $470.3 million, barely ahead of the Street’s $3.93 million forecast.

However, the bottom line was that the corporation fell short with adj. Earnings per share of $0.27 are significantly lower than the $0.83 predicted by analysts.

The corporation attributed the poor result to operational margin compression. RumbleOn anticipates full-year sales of between $1.85 billion and $1.90 billion. The consensus figure was $1.96 billion.

Investors were dissatisfied with the performance and dumped shares following the publication.

While the stock is up 41% year to date, it is still down 75% year to date.

Still Confident

B. Riley analyst Eric Wold believes that many people have yet to take advantage of the potential given here. “We remain confident that the company will achieve market share gains and more efficient vehicles in 2023,” he writes, “with our belief that RMBL ended 2022 with a healthier inventory of powersports and management’s confirmation that underlying demand for powersports vehicles has remained resilient.”

The new company’s operations can accomplish fulfillment centers going online in 1H23.

We also anticipate that a better understanding of RMBL’s strong cash position and cash flow forecast will aid in driving the stock higher in the coming quarters.”

Apparently, he also believes the stock is undervalued. His comments support a Buy recommendation, and Wold’s price target of $26 implies that the shares will return 185% over the next year.

Two other analysts have been following RMBL’s performance over the previous three months, and both are bullish on the stock, giving it a consensus rating of a Strong Buy.

The average price target of $16.33, implies that the stock can rise 79% in the next year.

The ACM Research Institute, Inc. (ACMR)

Our next strong buy stock comes from the chip industry, albeit indirectly. ACM Research is a high-end equipment supplier to worldwide semiconductor manufacturers.

The company has a major concentration on cleaning equipment, although it has broadened its offerings.

Founded in California in 1998, the company principally operates in China, where ACM research and development, and production take place.

Revenue nearly quadrupled year over year to $133.71 million in the most recent reporting period, exceeding projections by $20.4 million.

Similarly, adj. EPS of $0.42 came in slightly higher than the $0.23 expected by experts.

Earlier in January, ACM restated its full-year 2022 sales projection of $365 million to $385 million and stated that revenue in 2023 will be in the $515 million to $585 million range. This is much more than the $425.52 million consensus projection.

Investors loved the January update, which helped the stock rise 56% this year.

However, given the company’s heavy exposure to China, and accompanying risks, shares have fallen 55% in the last year.

“Depressed”

Benchmark analyst Mark Miller believes these developments have “depressed” markets, but he finds plenty of reasons to be positive.

“ACM is the top growth story among semi-equipment businesses, with predicted 47% YoY revenue growth for FY23, following 40% YoY sales growth in 2022,” said the 5-star analyst. “This growth will be driven by ACM’s SAPS and TEBO cleaning tools, which offer high yields, as well as incremental contributions from new customers and newer products, including ACM’s Ultra C wb, ECP map, ECP, and Ultra Furnace products. The company recently announced its entry into the chemical vapor deposition industry, greatly broadening its market coverage.“

Based on the developments, Miller maintains a Buy rating and a $32 price target on ACMR shares.

If his premise is correct, there might be a 166% gain in a year.

Analysts assess this stock as a Strong Buy, based on the consensus split of 4 Buy vs 1 Hold. Given the average target of $18.98, the consensus predicts for a 57.5% one-year gain.

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