Amidst the bustle of large tech giants taking up the artificial intelligence (AI) space and news headlines of leading pharmaceutical juggernauts marking key development milestones, many quality stocks can easily fly under an investor’s radar. Whether those are smaller companies producing innovative solutions or undervalued companies slowly working toward profitability, there lay hundreds of opportunities for investors that many investors have glazed over.

While these so-called sleeper stocks do carry more inherent risk due to lower investor sentiment and interest, investing in pivotal moments for these companies can yield unimaginable profits. A sleeping investment lays in its undervaluation: a catalyst yet to emerge, profitability yet to be realized or an acquisition that gets buried under larger drama. Yet, despite this potential, it can be difficult for an investor to discern whether an investment truly is a sleeper pick or simply a bad investment. As such, in this article, we will highlight three sleeper companies with serious potential to bring million-dollar results to an investor’s portfolio. 

Everest Group (EG)

Everest Group (NYSE:EG) is a dominant research firm that helps business leaders maximize operational and financial performance. Yahoo! Finance analysts estimate it will trade within a one-year price range of $403 to $522, averaging around $447.62.

So, what specifically makes Everest Group a sleeper stock? One thing is Everest’s undervalued valuation, where its P/E ratio (TTM) of 7.08x stands ~30% below the sector median of 10.26x. Similarly, its year-over-year (YoY) revenue growth rate boasts a solid 17.91%, a phenomenal edge over its sector median of 4.33%.

Profiting off the AI boom, Everest has been leveraging Generative AI into its Price Genius™ and Talent Genius™ analytics platforms. These platforms use AI-powered insights to provide solutions and intelligence on AMS pricing models, location and workforce management and overall data-driven to provide the best commercial decisions. To any investor looking for a sleeper pick also bound to profit off the AI boom, keep Everest Group on your watchlist!

PayPal Holdings (PYPL)

PayPal Holdings (NASDAQ:PYPL) is an online money transfer platform that enables the average user to send and receive money. Yahoo! Finance analysts estimate this stock will trade within a one-year price range of $56.00 to $120.00, with an average of $74.25.

PayPal’s plans to reinvent the PayPal App through CashPass bring many advantages. CashPass’ plans to give customers access to various cash-back offers allow PayPal to attract more recurring revenues and a loyal customer base. With the ability to see the best deals for common retailers, such as Walmart, CashPass will no doubt allow PayPal to synergize with other addressable demographics.

PayPal’s valuation is also sitting at a relatively discounted P/E ratio of 17.01x, lower than the sector average. Despite its huge stock price dropoff post-COVID-19, PayPal’s plans to focus on decreasing expenses while increasing its customers through innovative product offerings gives me the optimism to call this company a sleeper stock pick. 

Nkarta (NKTX)

Nkarta (NASDAQ:NKTX) is a biopharmaceutical company focused on natural killer (NK) cell therapies to treat cancer. In April 2023, NKTX released promising preliminary data for early-stage AML and NHL drugs, propelling the stock to nearly double its price. Currently, Yahoo! Finance projects this stock to trade at a one-year price target between an average of $15.63 and a high of $25. Similarly, despite low data maturity in terms of its valuation metrics, many Wall Street analysts have recently been eyeing this company with a Buy recommendation due to its potential as a disruptive leader in the NK space.

Looking forward at its product pipeline, Nkarta’s strong pace of development for solid tumor treatments, starting with its NKX101 (NKG2D), presents itself as a striking catalyst into 2024. While there is heavy competition in the natural cell therapies space, I believe a potential continuation of positive results in its coming H1 update presents NKTX as a stock whose price may just explode later this year. 

On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.