Navigating Stagflation: How Analyst Coverage Points to Undervalued Gems in a Volatile Market

The specter of stagflation—stagnant economic growth paired with rising inflation—has cast a shadow over global markets in 2025. With the Federal Reserve's rate-cut cycle uncertain and GDP growth projected to stall at just 1.4%, investors are scrambling to identify companies that can thrive amid these headwinds. Yet, amid the chaos, a clear signal emerges: stocks with surging analyst coverage and upgraded ratings are often the quiet winners. Four companies—Sezzle (SZL), Great Lakes Dredge & Dock (GLDD), OppFi (OPFI), and HNI (HNI)—are defying the gloom with robust fundamentals, institutional validation, and valuation metrics that suggest they're ripe for discovery.

The Analyst Coverage Edge in Stagflation

In turbulent markets, new analyst coverage acts as a beacon for investors. When brokerage firms boost their ratings or add fresh research on a stock, it signals a growing belief in its resilience. The four companies highlighted here have all seen increased broker ratings and improved average ratings over the past month—a trend that often precedes a stock's breakout. For instance, Sezzle, OppFi, and Great Lakes have all garnered Zacks Rank #1 (“Strong Buy”) designations, while HNI holds a #2 (“Buy”) rating, reflecting analysts' confidence in their earnings trajectories.

Sezzle (SZL): A Digital Payments Play with Explosive Growth

Sezzle's shares have surged 263.8% over the past three months, far outpacing its struggling industry peers. The digital payment platform's 2025 earnings per share (EPS) estimate has jumped to $3.26, up from $3.24 just a week ago, reflecting a 77.2% year-over-year growth projection. This momentum isn't accidental: analysts are betting on Sezzle's ability to capitalize on the shift to online commerce. With a valuation that remains reasonable despite its gains—its forward P/E ratio is still below industry averages—this stock is a rare “Strong Buy” in a sector starved for winners.

Great Lakes Dredge & Dock (GLDD): Infrastructure Resilience in Action

Great Lakes, a leader in coastal construction and environmental projects, has seen its shares climb 29.7% in three months. Analysts are bullish despite a projected 27.3% dip in Q2 EPS to $0.08, as the company's $1 billion backlog and contracts like the Woodside Louisiana LNG project provide long-term stability. The firm's VGM Score of “A” underscores its strong value, growth, and momentum metrics. With a forward P/E of 12.29—well below its sector's 20.6 average—GLDD offers a compelling entry point for investors seeking a play on infrastructure spending.

OppFi (OPFI): Lending in a Tight Credit Environment

OppFi, a fintech firm focused on personal loans, has defied the credit crunch with a 28.8% stock gain in three months. Its 2025 EPS estimate has risen to $1.23 from $1.07 over the past two months, pointing to 29.5% year-over-year growth. Analysts highlight OppFi's ability to maintain loan origination volumes even as interest rates rise, aided by its focus on underserved borrowers. The “A” VGM Score and a Zacks Rank #1 reflect confidence in its model's durability.

HNI (HNI): A Furniture Giant's Quiet Turnaround

HNI, a manufacturer of office furniture and storage systems, has gained 8.2% in three months—outperforming its industry's 0.7% decline. While its EPS growth of 14.4% may seem modest, its Zacks Rank #2 and VGM Score of “B” signal improving fundamentals. The company's focus on sustainable materials and e-commerce integration has repositioned it for a post-pandemic rebound. With a forward P/E of 15.4 and a dividend yield of 1.8%, HNI offers both growth and income potential.

The Screening Criteria That Separates Signal from Noise

These stocks passed a rigorous screen:
1. Broker Coverage Growth: Each has seen rising analyst interest, with new reports from top firms like Jefferies and Morgan Stanley.
2. Rating Improvements: Average ratings shifted from “Hold” to “Buy” or higher.
3. Liquidity and Accessibility: All trade above $5 per share with average daily volumes exceeding 100,000 shares, ensuring ease of entry and exit.

Act Before the Crowd Catches On

In a market obsessed with macroeconomic doom, these four companies exemplify the power of microeconomic tailwinds. Their improved earnings estimates, strong institutional validation, and valuation discounts make them prime candidates for investors seeking to “buy the dip” in a stagflationary environment.

The takeaway? Analyst coverage isn't just noise—it's a roadmap. With Fed policy still in flux and inflation pressures unresolved, investors should prioritize companies where rising analyst attention intersects with tangible fundamentals. These four stocks are positioned to thrive, and their under-the-radar status won't last forever.

Investment advice: Consider dollar-cost averaging into these positions over the next month. Use tools like Zacks' Research Wizard to stress-test scenarios before committing capital.

In a world where bad news sells headlines, these companies are proof that good fundamentals still drive returns—even in the bleakest markets.