Experienced investors know they should be willing to pay a premium price for a high-quality stock. On the flip side, not all names worth owning are necessarily priced at a premium. Sometimes the market simply undervalues a worthy stock because it's underestimating the underlying company's prospects. Such situations translate into tremendous buying opportunities for investors.

With that in mind, here's a rundown of three dirt-cheap stocks that could rocket higher sooner or later. Waiting until such a move clearly starts unfurling, of course, means you've waited too long to step in.

1. Alibaba

It's been a tough past three years for China's e-commerce powerhouse Alibaba (BABA 0.59%), and by extension for its shareholders.

The stock soared in 2020 thanks to the swell of online shopping spurred by the COVID-19 pandemic. Shares have been struggling ever since, though, and are now down more than 70% from their late-2020 peak thanks to a combination of China's economic malaise, Beijing's crackdown on many of China's technology companies, management turnover, and the recent cancellation of plans to spin off its cloud computing arm.

However, this prolonged sell-off looks past a handful of bullish details, not the least of which is the fact that China's economy is starting to fire on all cylinders again, while its consumers are spending accordingly. The country's industrial productivity grew 4.6% year over year in October, with retail sales growing 7.6%, accelerating September's growth rate of 5.5%.

Granted, the comparison figures were relatively low, reflecting results from a period when pandemic lockdowns were still in effect. The recent numbers reflect forward progress all the same, though, and more of the same is likely in the cards. Although still not as brisk as this full year's expected pace of 5.4%, the International Monetary Fund recently raised its 2024 growth outlook for China's economy from 4.2% to 4.6%.

The kicker: The cloud computing division Alibaba recently decided not to spin off? It's still not entirely clear why it's mulling an exit from this business. This arm finally swung to an EBITA profit back in 2021 and continued to widen those profits in the meantime. If nothing else, this operation's bottom-line contribution could help fund other growth initiatives.

Alibaba's per-share earnings are expected to grow from $9.34 per share this year to $10.16 next year thanks to projected sales growth of more than 13%. That translates into a forward-looking price/earnings ratio of only 7.3, which is cheaper than this stock's been in years.

2. Bristol Myers Squibb

In light of recent headlines, it's not entirely surprising that Bristol Myers Squibb's (BMY 0.34%) share prices are down nearly 40% from last November's high.

Chief among these headlines? Sales of its cancer-fighting drug Revlimid are falling -- fast now that generic versions of the treatment are available. It's a problem simply because it used to be the pharmaceutical giant's best-selling drug. That's since become blood thinner Eliquis, but it too is now facing generic competition. Medicare is also now allowed to negotiate prices for this particular treatment.

In the meantime, the Food and Drug Administration's potential approval of Bristol Myers Squibb's Abecma (idecabtagene vicleucel) for the treatment of some forms of myeloma has been delayed by the FDA's decision to assemble an advisory panel to review the requested approval of the therapy.

Although it's a different pharmaceutical outfit, Bayer's recently failed trial of blood-thinning drug asundexian has implications for Bristol Myers Squibb. Squibb's milvexian is a similar therapy, and could produce similar inefficacy in its phase-three trials, which are now underway.

Largely being overlooked by most investors, however, is the promise of the rest of its research and development pipeline. Its proven oncology drug Opdivo is in phase-three trials for seven additional indications, while its CAR-T cancer drug Breyanzi is showing promise as a treatment for several more types of Lymphoma. The company's also set to acquire Mirati Therapeutics sometime in the first half of the coming year, giving Bristol Myers Squibb access to Mirati lung cancer treatment Krazati (adagrasib) as well as Mirati's PD-1 inhibitor pipeline, which is also arguably being underestimated.

In the meantime, although far from being the heavy hitters that Krazati and Opdivo could become, Squibb's drugs like multiple sclerosis treatment Zeposia and psoriasis therapy Sotyktu have their value. They're just going to take longer to reach their full strides than initially expected. As new CEO Chris Boerner recently explained, "For the new product portfolio in totality, we continue to see very strong long-term potential consistent with what we've said previously. There's been no change in the conviction for this portfolio; in fact, the question really is a question of 'when,' not 'if.'"

In this vein, perhaps a new chief executive will ultimately be the shakeup the company and its stock need.

Whatever's in the cards and whenever it's coming, the stock's forward-looking price-to-earnings ratio of less than 7 is just too low to pass up. The dividend yield of 4.5% only bolsters the bullish case.

3. Carnival

Last but not least, add Carnival (CCL -0.66%) to your list of dirt-cheap stocks that could skyrocket soon.

It's a surprising suggestion given its backstory and current results. While the world is clearly vacationing again after being shut in during the COVID-19 pandemic, the backdrop isn't what it was before the coronavirus contagion took hold. Consumers are cash-strapped, feeling the full weight of rampant inflation. Cruise company Carnival is also feeling this weight, sitting on $29.5 billion worth of long-term debt it took on just to remain afloat during the pandemic. Back in 2019, the company's debt burden was a much more modest $9.7 billion.

There's also the not-so-small detail that Carnival has still been losing money despite firm demand for leisure cruises. Like its industry peers, this cruise company is facing higher operating costs of its own.

Now take a step back and look at the bigger picture. The gap between revenue and costs is narrowing. Indeed, Carnival swung back to an operating profit during the three-month stretch ending in August which helped the company put itself back into the black for the year. That followed last quarter's year-over-year revenue growth of 59% pushing its top line up to a record-breaking $6.9 billion. At its current pace of fiscal progress, the company should more or less break even this year.

It's what's expected to happen next year, however, that should stoke investors' interest. Even with a handful of economic headwinds blowing, the analyst community believes Carnival's fiscal 2024 top line will grow another 13%, pushing profits up to $0.91 per share. That will be the first full-year profit produced since 2019, with even bigger bottom lines expected beyond that.

It's surprising you can still buy this stock for a modest 17.7 times next year's projected earnings, although the recent rally from Carnival shares suggests most investors are beginning to connect the dots -- consumers aren't giving up leisure travel no matter the cost.