Undervalued Value Stocks in December 2025: Strategic Opportunities Amid Market Pullback

As global markets grapple with macroeconomic headwinds and shifting investor sentiment in late 2025, value investors are increasingly turning to discounted cash flow (DCF) analysis and intrinsic value mispricing to identify overlooked opportunities. This article examines three stocks-DexCom (DXCM), Webull (WEB), and ATRenew (ATRN)-through the lens of DCF modeling, earnings growth projections, and valuation discrepancies, highlighting potential mispricings in a risk-off environment.

DexCom: A Tale of DCF modeling.

DexCom, a leader in continuous glucose monitoring (CGM), has seen starkly contrasting DCF-based fair value estimates in late 2025. One analysis using a two-stage Free Cash Flow to Equity (FCFE) model calculates its intrinsic value at $126.38 per share, implying a 50% discount to its current price of $76 according to DCF modeling. Another model arrives at a similar figure of $126.02, further reinforcing the case for undervaluation as reported by value investing analysis. However, more conservative estimates, such as $60.64 according to market reports and $55.10 based on DCF summaries, suggest the stock may be overvalued at its current level.

The divergence stems from assumptions about growth rates and terminal values. Optimistic models assume sustained double-digit revenue growth driven by expanding diabetes management markets and product innovation, while cautious models factor in regulatory risks and market saturation. For instance, a base-case intrinsic value of $46.58 as calculated in DCF analysis relies on a 5% long-term growth rate, whereas bullish projections incorporate 10–15% growth. This highlights the importance of sensitivity analysis in DCF modeling: investors must critically evaluate whether DexCom's cash flow trajectory justifies higher multiples.

Webull: High Growth, High Uncertainty

Webull (WEB) has emerged as a standout in the fintech sector, with Q3 2025 results showing 55% year-over-year revenue growth to $156.9 million and adjusted operating profit of $36.7 million as reported in earnings. Its customer assets surged 84% to $21.2 billion, reflecting strong net deposits and product expansion according to press releases. DCF-based fair value estimates for Webull, however, are highly polarized.

A 2025 model projecting Free Cash Flow (FCF) of $386 million in 2025 and $590.9 million by 2035 calculates an intrinsic value of $17.95 per share, a 48.8% premium to its current price according to Webull's financial analysis. Conversely, a more conservative analysis using a 2025 FCF of $172.5 million estimates a fair value of $8.18, suggesting the stock is 82.9% overvalued based on financial projections. This wide range reflects divergent views on Webull's international expansion, regulatory risks, and margin sustainability.

While its Price-to-Sales (P/S) ratio of 8.97x exceeds both peer and industry averages according to financial reports, its Price-to-Earnings (PE) ratio of 12.7x aligns with fair valuation metrics as per financial analysis. Investors must weigh Webull's aggressive growth narrative-bolstered by new products like Vega AI and corporate bond trading-against potential regulatory scrutiny and slowing revenue momentum.

ATRenew: A Renewable Energy Play with High Upside

ATRenew (ATRN), a renewable energy solutions provider, has demonstrated robust growth in late 2025, with Q4 revenue guidance of RMB6,080–6,180 million (25.4–27.4% year-over-year growth) according to market guidance. Analysts project CN¥35.8 billion in revenue and CN¥1.1 billion in earnings by 2028, implying a 24.5% compound annual growth rate (CAGR) based on earnings projections. DCF models suggest a fair value of $6.61 per share, a 45.3% premium to its current price of $4.54 according to market analysis, while Wall Street analysts average a $8.16 price target, indicating a potential 54–58% upside as reported in analyst estimates.

ATRenew's free cash flow of $583.0 million as of December 2024 according to financial reports supports reinvestment and debt reduction, but its valuation hinges on continued margin expansion and government subsidies. Risks include intensifying competition and policy shifts, which could curtail its growth trajectory as noted in market analysis. Nonetheless, its Q2 2025 results-32.2% revenue growth and $16.9 million in adjusted operating income as reported in earnings-underscore its operational resilience.

Strategic Implications for Value Investors

The current market pullback has created fertile ground for value investors to capitalize on mispricings. DexCom's wide DCF valuation range reflects optimism about its long-term dominance in CGM, while Webull's high-growth fintech model presents both opportunity and risk. ATRenew's renewable energy play, though dependent on external factors, offers compelling upside if its growth assumptions materialize.

However, investors must approach these opportunities with caution. DCF models are only as reliable as their underlying assumptions. For DexCom, the key is whether its cash flow growth can outpace conservative projections. For Webull, the focus should be on sustaining profitability amid regulatory and competitive pressures. ATRenew's valuation hinges on its ability to maintain margins and secure subsidies in a volatile policy environment.

In a risk-off market, disciplined investors who rigorously test DCF assumptions and monitor earnings execution stand to benefit from these undervalued or mispriced assets. As the adage goes, "Price is what you pay; value is what you get." In December 2025, the market may be offering just that.