Despite the inflation concerns and the market ups and downs, 2024 will be a much better year for investors compared to 2023. The current market situation may not seem like it, but we’ve seen better days in the past few months. The earnings season is boosting the stock market, and the outlook could improve as we progress through the year. This is an ideal time to move away from the hot and attractive stocks and look at the undervalued sleeper stocks with high upside potential.

An early-mover advantage can reap significant benefits for you. Here are three undervalued sleeper stocks that can be solid bets this month. With at least one rate cut anticipated in the year, the financial environment will improve, and these stocks could benefit. They are cheap and have a substantial upside. Let’s take a look at three undervalued sleeper stocks. 

General Motors (GM)

Legacy automaker General Motors (NYSE:GM) isn’t new to the business, and the company has seen several market ups and downs. It survived inflation and is bouncing back with strong results. It beat expectations and reported a revenue of $43 billion, up 7.6% year-over-year. The net income increased to $2.9 billion, up 26% YOY. The increase was driven by a rise in truck sales, which saw a 7.4% YOY jump.

After the strong results, the management has increased the guidance for the year and expects adjusted earnings in the range of $12.5 billion to $14.5 billion, up from $12 billion to $14 billion. It also expects a higher free cash flow of $8.5 billion to $10.5 billion. 

The company was pivoting towards electrification, but the sector’s slump has left it worried about how to move forward. For now, the EV rollout looks like it is on track. However, with a strong presence in the combustion-powered vehicle industry, General Motors can keep growing revenue while finding ground in the EV sector. 

Trading at $45, GM looks like an undervalued stock to me. It also enjoys a dividend yield of 1.07%. While it is at the 52-week high, the company has ample potential to expand. It just proved that it can grow despite competition in the industry. Over half a dozen analysts have raised the stock’s price target after strong results. 

Robinhood (HOOD)

Having faced backlash in the GameStop (NYSE:GME) short squeeze during 2021, Robinhood (NASDAQ:HOOD) struggled with its image for a long time. These image problems are slowly vanishing, and users have started to trust the platform.

Robinhood reported record revenue and deposits in the first-quarter results. Up 40% YOY, the revenue stood at $618 million, and the net deposits reached $11.2 billion. The higher revenue was driven by the crypto revenue, which more than tripled. This was its second straight profitable quarter with net income at $157 million. 

Two important metrics impressed investors. The subscribers increased by 42% YOY, a 500,000 increase to end the quarter with 1.7 million users, and the average revenue per user hit $104, up 35% YOY. This is impressive growth, and long-term investors should focus on the fact that Robinhood is seeing steady user growth. The company has always aggressively acquired users, and its efforts have paid off. Its monthly active users also reported a 16% jump. 

Once a brokerage platform, the company has moved toward offering unique financial products and services that have attracted new users. It already has over 1 million users on the 3% cash-back credit card waitlist. 

Trading at $17 today, HOOD is an undervalued sleeper stock that can double over the next 12 months. The stock is up 12% YTD and 125% in the past six months. The concerns about the Wells notice are overblown, and an upside from the current level is certain. 

Robinhood is one of the best fintech stocks to own as the economy improves. 

Li Auto (LI)

Chinese automaker Li Auto (NASDAQ:LI) has been a frontrunner in the electric vehicle race since 2023. The company impressed the market with strong delivery numbers and fundamentals. However, the slump in the industry since the beginning of the year slowed its momentum. Li Auto might be down, but it is not out, and the undervalued sleeper stock has the potential to generate multi-bagger returns.

Li Auto has launched Li L6, a five-seater premium family SUV, and is set to launch lower-priced Li L7 and Li L8 variants this month. The company is steadily working on the launch of new models, which helps improve deliveries. In April, it reported deliveries of 25,787 vehicles, up 0.4% YOY. 

Li Auto ended the fourth quarter with a cash balance of $14.6 billion and a revenue of $5.88 billion, up 136% YOY. The liquidity allows the company to aim for higher growth, and it hasn’t considered global expansion yet. If Li Auto aims to go global, it will see massive growth across EV markets. 

Trading at $27 today, the stock has dropped 21% YTD and gone from the high of $45 to $27. This is your chance to grab the multi-bagger before it explodes. My InvestorPlace colleague, Faisal Humayun, thinks the stock could double before the end of the year. 

New launches, healthy delivery growth, and strong fundamentals make Li an ideal addition to your portfolio. The company reports first-quarter earnings on May 20. 

On the date of publication, Vandita Jadeja 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.