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When it comes to identifying undervalued stocks, having the right analytical tools can make all the difference. This was clearly demonstrated by InvestingPro’s Fair Value model, which successfully identified SolarWinds Corporation (NYSE:SWI) as significantly undervalued in January 2024. For investors seeking similar opportunities today, our Most undervalued list continues to highlight promising candidates using the same proven methodology.
SolarWinds, a leading provider of IT management software, caught the attention of InvestingPro’s Fair Value models when trading at $11.57. The company, despite facing headwinds, showed strong fundamental potential with annual revenues of $758.74 million and improving operational metrics. The model identified a significant mispricing, estimating an upside potential of 43.39%.
The subsequent performance validated this analysis comprehensively. Over the following 13 months, SWI’s stock price steadily climbed, ultimately reaching $18.25 - delivering a remarkable 57.74% return for investors who followed the signal. This journey was supported by substantial fundamental improvements, including a 31.4% increase in EBITDA to $273.46 million and a dramatic turnaround in earnings per share from -$0.055 to $0.66.
Recent developments have further reinforced the strength of the original analysis. The company’s latest quarterly results showed continued revenue growth, reaching $796.90 million annually, while maintaining strong operational efficiency. The stock has shown particular momentum in early 2025, with February marking new highs near the 52-week peak of $18.55.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, peer comparisons, and market sentiment indicators. This comprehensive approach helps identify stocks trading significantly below their intrinsic value, while considering company-specific factors and market conditions. The success with SolarWinds demonstrates the effectiveness of this multi-faceted analytical framework.
For investors looking to replicate such success, InvestingPro offers access to the same powerful Fair Value models that identified this opportunity. Beyond valuation analysis, subscribers gain access to real-time financial metrics, earnings forecasts, and proprietary indicators that can help identify the next potential market winner. The SolarWinds case study shows how combining these tools with disciplined analysis can lead to substantial investment returns.