It has been a turbulent few weeks for the stock market, driven in part by concerns about China's economic stability and political uncertainty about the U.S. government debt ceiling. But still, the major market correction some analysts have been predicting has yet to occur.

The broad S&P 500 market index sits roughly 3.6% below its all-time high, with popular high-growth technology stocks presenting few opportunities to be purchased at a discount. To find value in this market environment, investors might need to look instead at companies that aren't on everybody else's radar.

Two great examples are payments powerhouse Fiserv (FI 0.16%) and action camera company GoPro (GPRO -6.33%). Both stocks are cheap on a valuation basis, and nobody's talking about them. Let's look at why that could present a big opportunity.

Customer making a contactless payment to employee in small goods store.

Image source: Getty Images.

1. The case for Fiserv

Fiserv isn't a consumer-facing fintech company like Paypal or Square. Instead, it operates more behind the scenes and serves banks, financial institutions, and merchants. For that reason, Fiserv hasn't received the same level of attention from investors. But as an industry mainstay, it should. 

The company's products and services are critical to over 6 million businesses worldwide through its point-of-sale systems driven by the cloud-based Clover platform. Known as merchant acceptance, this segment is the fastest-growing part of Fiserv's revenue mix, at 43% in the most recent second quarter -- with Clover generating 96% growth as a stand-alone brand.

Fiserv is similarly important to the 10,000 banks and financial institutions it serves, facilitating the instant payment processing their customers demand. And Fiserv's white-label financial technology software is the driving force behind the online banking platforms those institutions offer to their clients. 

The company's segments combine to reach every single household in America, and that's an unmatched level of dominance. 

Metric

2018

2021 (Estimate)

CAGR

Revenue

$5.8 billion

$16.4 billion

41%

Earnings per share

$2.87

$5.55

24%

Data source: Company filings. 

Fiserv is highly profitable, and thanks to its diverse business mix across the financial sector, it's very difficult to disrupt. The company has a history of deal-making, and in the second quarter announced a joint venture with Deutsche Bank to offer Clover point of sale to 800,000 new merchants. This could be a big future growth driver for the already strong platform. 

Fiserv is the fourth-largest holding in the Global X Fintech ETF. The ETF trades at a price-to-earnings multiple of 41 times, yet Fiserv as an independent company trades at just 21 times (on a trailing-12-month basis). That makes it cheap compared to a basket of its peers, and most of them don't have the same 37-year track record or robust profitability.

Investors are getting a great deal on this silent achiever right now, and it could deliver big rewards over the long term.

A climber clinging to rocks near the summit of a mountain, above the clouds.

Image source: Getty Images.

2. The case for GoPro

In investment circles, GoPro is sometimes derided as a company with a one-dimensional business model -- selling cameras and accessories. The company's stock eventually grew stale and its price collapsed by over 95% between the years 2014 and 2020.

But a transformation is underway.

On the camera and hardware side, GoPro made changes to the way it sells its products. Rather than being totally reliant on retail partners to sell its products, it launched a direct-to-consumer model using its GoPro.com website, which now accounts for over 35% of all sales. This adjustment means GoPro keeps a larger percentage of the profits, helping to boost gross margins from 30% to nearly 40%.

But the real game-changer is the company's new subscription business. Loyal GoPro customers can access exclusive product discounts, cloud storage, and replacements for damaged cameras for $49.99 per year. Over 1.1 million people had signed up by the recent second quarter -- a growth rate of 211% from the same time last year. But the best part is that subscriptions have gross margins of 70% to 80%, so they're mostly profit.

Metric

Q2 2019 (TTM)

Q2 2021 (TTM)

CAGR

Subscription revenue

$12.1 million

$35.8 million

72%

Data source: Company filings. TTM = trailing 12 months. CAGR = Compound Annual Growth Rate

The company expects subscriptions will generate $90 million in revenue for the full year 2022, marking an acceleration over current growth rates. It would be just a fraction of GoPro's $1.24 billion in expected revenue next year, but since the company has struggled with top-line growth, this new income stream is a critical part of the turnaround story. If subscriber growth rates keep the current pace, it won't be long before they're a very significant piece of the overall business. 

Analysts expect GoPro to deliver $0.76 in earnings per share for 2021, which means the stock trades at a price-to-forward earnings multiple of just 12 times. It would be the strongest yearly profit the company has earned since 2014. But on a price-to-sales basis, the stock looks even cheaper, with $1.15 billion in revenue and a $1.5 billion market capitalization equaling a 1.3 multiple.

For investors willing to hold through this transformative phase, GoPro stock could deliver big returns over the next few years. It's coming off a very low base valuation, so the upside could be in the triple-digit percentages if the company continues to execute. 

But best of all, few people are talking about this opportunity right now.