As the S&P 500 hovers near its all-time highs, it might not seem like the best time to buy new stocks. After all, Warren Buffett warned investors to be "fearful when others are greedy" -- and there's a lot of greed baked into the S&P 500 right now at more than 30 times earnings.
But even though the broader market looks frothy, there are plenty of stocks that still look undervalued relative to their growth potential. Two of those underappreciated stocks are Opendoor Technologies (OPEN +1.02%) and Lumen Technologies (LUMN +5.43%), which could both churn a modest $2,000 investment into a lot more cash over the next few years.
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Opendoor Technologies
Opendoor is the largest instant buyer (iBuyer) of homes in America. It makes instant cash offers for homes, fixes them up, and relists them on its own marketplace. This business model flourished during the post-pandemic housing boom when interest rates were still low, but fizzled out in 2022 and 2023 as soaring interest rates chilled the market.
NASDAQ: OPEN
Key Data Points
The Fed's three rate cuts in 2024 drove Opendoor to buy more houses again, but the company doesn't expect the housing market to fully recover this year as mortgage rates remain high and its sellers broadly outnumber its buyers. But from 2025 to 2027, analysts expect its revenue to grow at a CAGR of 11% as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turn positive by the final year.
That recovery should be driven by stabilizing rates, more listing partnerships (with home builders, real estate platforms, and agents), and new features like Opendoor Exclusives (which connect its sellers to buyers) to curb its dependence on its capital-intensive iBuying platform. It's also improving its pricing model with constant AI upgrades.
Its recent appointment of Shopify's chief operating officer Kaz Nejatian as its new CEO -- as well as the return of its co-founders, Keith Rabois and Eric Wu, to its board -- could spur even more changes. That might be why Opendoor's insiders bought more than twice as many shares in the past quarter as they bought over the past 12 months. Its stock has already rallied nearly 470% this year in anticipation of its recovery, but it still looks cheap at less than 2 times next year's sales.
Lumen Technologies
Lumen, the telecom company formerly known as CenturyLink, didn't expand into the higher-growth wireless market like its industry peers. Instead, it expanded its wireline networks with a goal of generating slower, but steadier, returns. Unfortunately, the growth of its fiber networks couldn't offset the persistent declines at its business wireline division, and its annual revenue plunged from $23.4 billion in 2019 to $13.1 billion in 2024. It also eliminated its dividend in 2022, and its stock price plunged below $1 last June.
NYSE: LUMN
Key Data Points
But just as it seemed like Lumen would get delisted, Microsoft and several other tech giants hired it to upgrade their data centers with its fiber optic cables for the latest cloud and AI applications. The cumulative value of those deals reached $8.5 billion at the end of 2024, then rose to $9 billion in the second quarter of 2025. It's also cutting costs to generate $1 billion in cumulative savings through the end of 2027, and it recently agreed to sell its consumer fiber-to-the-home business to AT&T for $5.75 billion. From 2024 to 2027, analysts expect Lumen's revenue and adjusted EBITDA to decline at a moderate rate as it continues to right-size its business.
But looking beyond 2027, it could grow again as it gains more data infrastructure customers and starts recognizing more revenues from those cloud and AI contracts. Its stock still looks dirt cheap at just 0.5 times next year's sales, and its insiders also bought more than three times as many shares as they sold over the past 12 months. That low valuation and warmer insider sentiment indicate that Lumen's unloved stock could soar a lot higher over the next few years.
