Three Bargain Stocks Worth Considering in Today’s Market

With the market experiencing a pullback, a new opportunity emerges for investors to hunt for bargains and acquire undervalued stocks. It is important to remember that while markets fluctuate, stocks have historically outperformed in the long run.

In this context, let’s discuss three affordable stocks that investors can consider now, each requiring only a small initial investment. I personally hold all three of these stocks in my portfolio.

Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to buy at this moment. Learn More »

Alibaba

Alibaba (NYSE: BABA) has remained resilient during the current market sell-off and continues to be regarded as one of the most affordable stocks available. The company’s shares trade at a forward price-to-earnings (P/E) ratio of less than 15 based on 2025 analyst estimates, complemented by substantial cash reserves and marketable securities on its balance sheet.

Investors are paying close attention to Alibaba’s advancements in artificial intelligence (AI). The company has showcased its Qwen 2.5-Max foundational AI model, which serves as a basis for various specialized open-source AI applications in language, audio, vision, coding, and mathematics.

In the most recent quarter, Alibaba’s cloud intelligence division reported a 13% increase in revenue, reaching $4.3 billion. Notably, revenue attributed to AI-related services surged for the sixth consecutive quarter with a triple-digit growth rate. Additionally, by phasing out low-margin contracts, the company’s adjusted EBITA (earnings before interest, taxes, and amortization) grew by 33% to $430 million.

The e-commerce segments, Tmall and Taobao, have also started to show signs of recovery. Taobao enables both businesses and consumers to sell, whereas Tmall focuses exclusively on business-to-consumer transactions for established brands. Strategic investments to enhance gross merchandise value and the introduction of new AI marketing tools have contributed to improved performance in this sector. Overall, revenue from these segments rose by 5%, with third-party business revenues increasing by 9%.

In summary, Alibaba presents a compelling investment opportunity at its current valuation.

Image source: Getty Images

e.l.f. Beauty

e.l.f. Beauty (NYSE: ELF) has faced a challenging year, with shares plummeting nearly two-thirds. However, this downturn places the stock in attractive bargain territory, currently trading at a forward P/E of 23 and a price/earnings-to-growth (PEG) ratio of 0.5, indicating potential undervaluation.

The stock’s decline followed a revenue growth forecast revision that lowered expectations to just 1% to 2%. This adjustment was driven by unfavorable industry trends and concerns over a prospective TikTok ban, which would adversely affect e.l.f.’s influencer marketing strategy. Nonetheless, the company has successfully captured significant market share in the mass-market cosmetics sector in recent years.

Looking ahead, e.l.f. has various growth opportunities, including an expansion into the skincare market and venturing into adjacent categories such as fragrance. Additionally, the company is making strides in international markets.

It’s important to acknowledge the resilience of the cosmetics industry during recessions, often represented by the “lipstick index” phenomenon, which suggests that women continue spending on small luxuries like cosmetics, even amid financial constraints. E.l.f. is also expected to increase its retail presence at major partners like Target later this year.

In conclusion, this represents a prime opportunity to acquire shares of a leading cosmetics firm at a discounted price.

Crocs

With shares of Crocs (NASDAQ: CROX) down roughly 20% over the past year, they are currently priced at an enticing forward P/E of under 8. The Crocs brand has performed admirably, largely due to international expansion, while challenges have arisen from its HeyDudes brand, acquired in early 2022.

Revitalizing the HeyDudes brand represents a significant opportunity, with recent fourth-quarter results reporting flat sales compared to last year. The company is focusing on marketing and celebrity endorsements to enhance brand visibility and is strategically targeting young females. This strategy resulted in a remarkable 160% increase in new female customers aged 18 to 24 during the past quarter.

Although the new HeyDudes products are gaining traction, Crocs must continue to reduce older inventory and revert to full-price sales. However, the company made progress last quarter following previous sales declines. The Crocs brand itself is expected to thrive, backed by ongoing international growth and product innovation.

Crocs remains financially robust, generating $923.2 million in free cash flow in 2024, providing the company with ample flexibility to reduce debt, repurchase undervalued shares, and pursue growth initiatives. It is indeed an affordable stock worthy of consideration in the current market environment.

Should You Invest $1,000 in Alibaba Group Right Now?

Before deciding to invest in Stock in Alibaba Group, take this into account:

The Motley Fool Stock Advisor analyst team recently announced their selection of the 10 best stocks to purchase, and Alibaba Group did not make the list. The chosen stocks have significant potential for substantial returns in the coming years.

For instance, if you had invested $1,000 in Nvidia when it appeared on this list on April 15, 2005, your investment would now be worth $666,539!

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Geoffrey Seiler owns shares in Alibaba Group, Crocs, and e.l.f. Beauty. The Motley Fool has positions in and recommends Target and e.l.f. Beauty. The Motley Fool recommends Alibaba Group and Crocs. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.