Value Investing in 2025: Unlocking Undervalued Opportunities with Low P/B Stocks

As 2025 draws to a close, the investment landscape continues to reward those who prioritize disciplined value strategies. In an era marked by macroeconomic uncertainty and shifting market dynamics, low price-to-book (P/B) stocks with strong fundamentals and robust earnings growth potential stand out as compelling opportunities. This analysis identifies five such stocks-AES Corporation (AES), BorgWarner (BWA), Enersys (ENS), PG&E Corporation (PCG), and Keros Therapeutics (KROS)-which combine attractive valuations, high Zacks rankings, and solid projected earnings growth to form a diversified portfolio of undervalued, high-growth candidates.

AES Corporation: Energy Infrastructure with Attractive Valuation

AES Corporation, a global power company, holds a Zacks Rank of #2 (Strong Buy) and a Value Score of A, reflecting its strong earnings momentum and favorable valuation metrics. With a projected 3-5-year EPS growth rate of 11.2%, AES is well-positioned to capitalize on the transition to renewable energy and grid modernization. While its P/B ratio is not explicitly stated in recent reports, its inclusion in the "low P/B" category underscores its appeal as a value stock. Investors should note that AES's strategic focus on clean energy and its operational efficiency in emerging markets provide a durable earnings foundation.

BorgWarner: Automotive Innovation with Strong Earnings Momentum

BorgWarner, a leading supplier of powertrain systems, also carries a Zacks Rank of #2 and a Value Score of A, with a projected EPS growth rate of 10.2% over the next three to five years. The company's P/B ratio of 1.61 as of December 2025 suggests it is trading at a discount relative to its tangible assets, a compelling signal for value investors. BorgWarner's pivot toward electrification and hybrid technologies aligns with global automotive trends, positioning it to benefit from the long-term shift in transportation demand.

Enersys: Energy Storage and Industrial Batteries with Low P/B

Enersys, a manufacturer of industrial batteries, holds a Zacks Rank of #1 (Strong Buy) and a Value Score of B, with a projected EPS growth rate of 15.0%. Its P/B ratio of 2.94 as of December 2025 may appear elevated at first glance, but this metric must be contextualized within the energy storage sector, where intangible assets and growth potential often justify higher valuations.

Enersys's dominance in critical infrastructure applications-such as telecommunications and renewable energy systems-provides a stable cash flow stream and long-term growth visibility.

PG&E Corporation: Utilities Sector with Defensive Characteristics

PG&E Corporation, a major utility provider, has a Zacks Rank of #2 and a Value Score of A, with a projected EPS growth rate of 15.9%. Its P/B ratio of 1.13 as of December 2025 is notably below its 3-year and 5-year averages, indicating potential undervaluation relative to historical norms. Utilities like PG&E offer defensive characteristics, including stable demand and regulated earnings, making them attractive in volatile markets. The company's focus on grid resilience and decarbonization further enhances its long-term appeal.

Keros Therapeutics: Biotech Disruptor with Explosive Growth Potential

Keros Therapeutics, a biopharmaceutical company, stands out with a Zacks Rank of #1 and a Value Score of A, coupled with a projected 3-5-year EPS growth rate of 36.5%. Its P/B ratio of 2.73527 reflects a market valuation that, while higher than traditional value stocks, is justified by its pipeline of innovative therapies targeting rare diseases. Keros's ability to secure regulatory milestones and partnerships positions it as a high-conviction play for investors seeking asymmetric risk-reward profiles.

Strategic Implications for Value Investors

The five stocks highlighted above demonstrate that value investing in 2025 is not limited to traditional "bargain" sectors. Instead, it requires a nuanced approach that balances low P/B ratios with strong earnings growth and sector-specific fundamentals. By leveraging Zacks rankings-a tool that evaluates earnings surprises and momentum-investors can identify companies poised to outperform in the coming year.

For example, AES and BorgWarner represent industrial and energy sectors where capital efficiency and technological adaptation drive value creation. Enersys and PG&E offer defensive characteristics in energy storage and utilities, while Keros Therapeutics exemplifies the growing intersection of value and growth in biotech. Together, these stocks form a diversified portfolio that mitigates sector-specific risks while capturing growth across multiple economic cycles.

Conclusion

As 2025 concludes, the market presents a unique opportunity for value investors to capitalize on mispriced assets. AES, BorgWarner, Enersys, PG&E, and Keros Therapeutics exemplify the blend of low P/B valuations, strong Zacks rankings, and robust earnings growth that defines today's most compelling investment opportunities. By adopting a disciplined, data-driven approach, investors can unlock these undervalued gems and position themselves for outperformance in the evolving market landscape.