3 'Underdog Stocks' For The Rest Of 2025

With the S&P 500 Index meandering along at a 1.69% year-to-date return, you can't fault investors looking for some juice out of their portfolios at the mid-point of 2025.

One way to increase your portfolio’s profit potential is to look for undervalued stocks that aren't generating headlines or creating buzz on Reddit but are showing signs of popping in the second half of 2025.

Undervalued stocks are securities that trade below their assumed value.

That low price may be justified, as a low stock price doesn’t guarantee a future rebound if the underlying business doesn’t improve.

"Yet companies with strong net margins, low earnings multiples (relative to price), and clean balance sheets are more likely to be resilient and do well through downturns," said Dan Buckley, chief analyst at DayTrading.com

Buckley points to one underdog stock that made it big: Advanced Micro Devices AMD.

"Look at Advanced Micro Devices, which for years was a distant second to Intel in the semiconductor industry," he said. "10 years ago, it commonly traded at around a market cap of only $3 billion, and now it's over $200 billion."

Buckley noted that AMD’s resurgence was driven by a strategic pivot under CEO Lisa Su. The company focused on high-performance computing and consistently delivered innovative, powerful chips that won significant market share.

"This turnaround shows how strong leadership and a clear, forward-looking strategy can transform an underperforming company into a market leader," Buckley said.

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3 Potential Underdog Stocks for 2025

Benzinga canvassed several market mavens this week and asked them for potential powerhouse underdog stocks waiting for their chance to howl – here's what they had to say.

Centene

Year-to-Date Performance: -8.96% as of June 20, 2025

Benzinga Value Rating: 73.05

Brian Krawez, CFA and president of Scharf Investments, LLC, likes Centene CNC, a healthcare enterprise company.

"CNC is one of our favorite under-the-radar stocks," Krawez said. 

Centene is a health insurance managed care organization (MCO) focusing on the Medicaid, Medicare, and ACA Marketplace programs. Founded in 1984, Centene is the top player in Medicaid and Marketplace and now has 28 million members across the US.

"It collects premiums from the health plan sponsors and contracts with the providers to pay for care services that its members use," he noted.

Over the past 10 years, CNC has grown revenue by +26% CAGR and adjusted accordingly. EPS stands at plus-20% CAGR, driven by a steady Medicaid program expansion. "Recently, earnings growth has slowed due to post-COVID Medicaid redetermination and elevated member care utilization rates," Krawez added. "But as the states update the price reimbursement to reflect this increased member utilization level, we expect CNC to return to a more normalized margin."

Krawez believes that in the long haul, Medicaid will continue to grow at its historical rate of 5%-7 %, which would be good news for CNC shareholders. "It's the largest player in the space and should continue to leverage its scale and expertise in steering care to the most efficient place and grow earnings double-digits," he said. “In addition, management is a good capital allocator and has been aggressively buying back stock, signaling their confidence in the company's prospects."

Wendy's

Year-to-Date Performance: -30.49%

Benzinga Value Rating: 40.88

Buckley's favorite underdog stock is the iconic fast-food chain, Wendy’s WEN.

"Wendy's has strong brand recognition, a quality P/E ratio (12x) in an otherwise relatively expensive market, and consistent dividend payments (around a 5% yield)," Buckley said. "Yet it's currently overshadowed by current market pressures."

Additionally, the company’s digital growth and international expansion represent "compelling long-term value" that the market might be underappreciating, he added. "Many consumers are also highly value-conscious, which can support Wendy’s growth as it competes on affordability."

Pivoting to a more efficient digital operation should help Wendy’s, too.

"While the fast-food industry faces challenges with reduced foot traffic, Wendy’s focus on meal deals and growing its digital and delivery platforms caters directly to current consumer preferences for convenience and value," he added.

Eli Lilly

Year-to-Date Performance: 1.69%

Benzinga Quality Rating: 89.63

Chad Harmer, chief investment officer, founder, and financial planner at
Harmer Wealth Management Corp. favors Eli Lilly LLY as its underdog play in 2025.

"Major advancements in Eli's Obesity and Diabetes drugs like Mounjaro set the company up incredibly well for growth in the current market," Harmer said. "Moving forward, Eli is incredibly well-positioned to benefit from the aging population with Alzheimer’s therapies like Donanemab, bone health and osteoporosis treatments like Forteo, and an expanded pipeline in autoimmune and inflammatory diseases, all conditions prevalent in older age groups."

Harmer says, like with all of the above stocks, investors have to tread cautiously when vetting underdog stocks.

"Watch out for the ‘Value Trap,’" he added. "Stocks that seem cheap or undervalued need to be carefully investigated to ensure business fundamentals, management, and growth projections remain strong."

Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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