As the first-quarter earnings season draws to a close, a large share of US-listed stocks are beating analysts’ estimates. Combining the results of firms in the Morningstar US Market Index that have reported earnings with the analyst expectations for those yet to publish, earnings are on track to grow 25.4% from the fourth quarter of 2025, above the three-year average of 9.7% and the highest rate since the fourth quarter of 2021.
At the same time, among the companies that reported earnings as of May 21, more than half of the US-listed stocks covered by Morningstar beat FactSet consensus estimates by 5% or more. Even better for investors looking to put their money to work, our analysts believe a few of these stocks remain undervalued.
To highlight these opportunities, we screened for undervalued stocks that crushed earnings and revenue expectations for the quarter. More details on our screen and comments from Morningstar analysts can be found later in this article.
7 Undervalued Earnings Crushers
How Do First-Quarter Earnings Stack Up?
At the time of writing, 92% of the 827 US-listed stocks covered by Morningstar analysts have reported earnings. Of those, 54% beat the FactSet mean estimates for their earnings by 5% or more, up from the 44% seen last quarter. About 14% missed earnings estimates by 5% or more, just below the 16% last quarter. Fewer companies reported in line with expectations: 32% versus 40% last quarter.
How We Screened for Stocks That Beat Earnings Expectations
While Morningstar analysts pay close attention to earnings, they focus on long-term results and valuations. One quarter doesn’t usually lead to a change in a stock’s fair value estimate unless new material information affects the assumptions behind that valuation. For example, new data on a drug could raise the probability of its approval, or pricing gains on a key product line could affect an analyst’s long-term thinking. Still, looking at quarterly earnings with valuations in mind can help long-term investors identify opportunities.
We screened for stocks that beat earnings expectations by 10% or more but remain undervalued. To help keep the focus on companies with truly strong results that did not beat expectations through accounting gimmicks or one-time factors, we also screened for revenue beats of 5% or higher. We filtered those results for stocks with economic moats, a Morningstar Rating of 4 or 5 stars, and a price/fair value ratio of 0.8 or lower.
Of the 721 US-listed stocks covered by Morningstar analysts that have reported earnings so far, seven met the criteria.
Adient
- : Gain of $0.52 versus the consensus estimate of $0.44Earnings Per Share
- : $3.9 billion versus the consensus estimate of $3.6 billionRevenue
- : ★★★★★Morningstar Rating
- : 70%Discount to Fair Value
“Adient’s stock rose over 8% during May 6 trading after it modestly raised fiscal 2026 guidance for revenue, adjusted EBITDA, and free cash flow and reported fiscal second-quarter adjusted diluted EPS of $0.52 that beat the $0.43 LSEG consensus.
“We think the firm had a good quarter despite challenges from the Iran war and its largest customer’s most important vehicle program (Ford F-Series pickups) on limited production due to a Novelis aluminum plant fire.
“We are raising our fair value estimate for narrow-moat Adient to $69 per share from $67 on the time value of money and from lowering our weighted average cost of capital to 9.3% from 9.4%. The change is simply a more granular expression of our existing risk assessment.”
—David Whiston, senior equity analyst
Whiston has more about Adient here.
Amer Sports
- Earnings Per Share: Gain of $0.38 versus the consensus estimate of $0.31
- Revenue: $1.9 billion versus the consensus estimate of $1.8 billion
- Morningstar Rating: ★★★★
- Discount to Fair Value: 24%
“Amer’s first-quarter earnings beat consensus estimates, with revenue up 26% on a currency-neutral basis, and operating profit surged 50% year over year. Management raised full-year 2026 operating profit guidance by an amount similar to this quarter’s beat.
“The quarter validates our thesis that Amer houses three distinct growth engines at different stages of maturity, and all three are now performing well simultaneously. As the market continues to recognize the long-term growth runway, consensus estimates should converge toward ours.
“We raise our fair value estimate for Amer by 7% to $46, reflecting higher revenue growth and margin assumptions that translate into an average 10% increase in our operating profit forecast over the next five years.”
—Ivan Su, senior equity analyst
The rest of Su’s take on Amer Sports can be found here.
Amphenol
- Earnings Per Share: Gain of $1.06 versus the consensus estimate of $0.94
- Revenue: $7.6 billion versus the consensus estimate of $7.0 billion
- Morningstar Rating: ★★★★★
- Discount to Fair Value: 35%
“Amphenol reported phenomenal first-quarter results and second-quarter guidance, highlighted by a near-doubling of data center revenues year over year. March-quarter revenue rose 58% year over year to $7.6 billion, and the $8.15 billion second-quarter sales guidance implies 44% year-over-year growth.
“Amphenol is benefitting massively from AI infrastructure investments with its best-of-breed data center connector portfolio. We appreciate the firm’s data center opportunity, but continue to see it as a well-diversified growth story, with exceptional industrial and defense growth.
“We raise our fair value estimate for wide-moat Amphenol to $190 per share from $170, as we raise our medium-term growth estimates for data center sales off a blowout quarter. Shares rose 5% intraday but remain undervalued, in our view. Amphenol is one of our top picks in technology hardware.”
—William Kerwin, senior equity analyst
Kerwin has more about Amphenol stock here.
Atlassian
- Earnings Per Share: Gain of $1.75 versus the consensus estimate of $1.33
- Revenue: $1.8 billion versus the consensus estimate of $1.7 billion
- Morningstar Rating: ★★★★★
- Discount to Fair Value: 61%
“Atlassian reported third-quarter results that crushed guidance, with revenue up 32% year over year to $1.787 billion and a non-GAAP operating margin of 31.7%, versus the high end of guidance at $1.697 billion and 27.5%, respectively.”
“Atlassian reported another strong quarter, including both headline numbers and underlying metrics. Revenue benefited from the sunsetting of its data center solutions, with some up-front revenue recognition, price increases, and the pull forward of some deals.”
“We maintain our fair value estimate at $220 per share for now for narrow-moat Atlassian. Considering the AI data points, quarterly results, good guidance, and accelerating buybacks, we see shares as attractive, especially given the software massacre in recent months.”
—Dan Romanoff, senior equity analyst
Read Romanoff’s full take on Atlassian here.
Fair Isaac
- Earnings Per Share: Gain of $12.50 versus the consensus estimate of $10.89
- Revenue: $692 million versus the consensus estimate of $630 million
- Morningstar Rating: ★★★★★
- Discount to Fair Value: 39%
“Fair Isaac reported fiscal second-quarter revenue of $692 million, up from $499 million last year amid 127% growth in mortgage revenue. Strong results, an upgraded outlook, and management’s strong defense of its market share sent shares up as much as 13% in after-hours trading.
“After incorporating fiscal second-quarter results, we are maintaining our wide moat rating and our fair value estimate of $2,020 per share. We view the shares as undervalued and believe that Fair Isaac’s market share is likely to remain dominant.”
—Rajiv Bhatia, equity analyst
Bhatia has more about Fair Isaac stock here.
- Earnings Per Share: Gain of $1.01 versus the consensus estimate of $0.57
- Revenue: $663 million versus the consensus estimate of $608 million
- Morningstar Rating: ★★★★
- Discount to Fair Value: 27%
“Reddit kicked off 2026 with another outstanding quarter. Revenue grew 69% to $663 million, while adjusted EBITDA margins of 40% were up from 29% a year ago. Finally, the firm’s ARPU, or average revenue per user, grew 44% year over year, while the user count grew 17% over the same period.
“This quarter is the seventh straight quarter of top-line growth in excess of 60%, a striking feat for a firm with an annual sales run-rate of more than $2.6 billion. We attribute this strength to the firm’s bottom-up effort to build an attractive, high-return ad channel.
“We maintain our $200 per share fair value estimate for narrow-moat Reddit and continue to view shares as undervalued, even accounting for the after-hours pop in share price.”
—Malik Ahmed Khan, senior equity analyst
Take a deeper dive into Khan’s outlook for Reddit.
Rocket Companies
- Earnings Per Share: Gain of $0.15 versus the consensus estimate of $0.11
- Revenue: $2.9 billion versus the consensus estimate of $2.8 billion
- Morningstar Rating: ★★★★
- Discount to Fair Value: 20%
“Rocket reported good first-quarter results with adjusted revenue rising to $2.82 billion from $1.36 billion last year, though much of this growth came from the acquisition of Mr. Cooper in October. Adjusted diluted earnings per share rose to $0.15 from $0.04 last year.
“The acquisition of Mr. Cooper makes Rocket’s year-over-year growth rates difficult to interpret, but this was a solid quarter for Rocket, with adjusted revenue coming in above guidance.
“As we incorporate first-quarter earnings, we will maintain our $17.20 fair value estimate for narrow-moat Rocket. We see the shares as undervalued at the current price after their weak performance so far in 2026.”
—Michael Miller, equity analyst
Investors can find more of Miller’s take on Rocket here.
