3 Growth Stocks Wall Street Might Be Sleeping On, but I'm Not

Most of the time, the collective wisdom of individual and professional investors is on target. That is to say, (allowing for the occasional hysterics-driven volatility) a stock's price is usually a fair reflection of its actual value.

Every now and then though, the crowd gets it wrong, undervaluing a particular ticker. That spells opportunity for anyone able to see the mistake and capitalize on it.

To this end, here's a closer look at three growth stocks that Wall Street doesn't appear to be all that bullish on, but arguably should be.

Image source: Getty Images.

1. Chewy

If you have a pet, you've almost certainly heard of Chewy (NYSE: CHWY). While the online store still sells less pet food, pet supplies, and pet toys than Amazon and major brick-and-mortar retailers collectively do, Chewy is holding its place as the United States' top pet-focused e-commerce platform. It's on pace to do on the order of $12.6 billion worth of business this year. That's a little more than 6% better than 2024's top line, extending slow but steady progress that more or less matches (but slightly outpaces) the industry's past and projected overall growth.

What this company lacks in raw growth firepower, however, it makes up for in other ways. Namely, its revenue growth -- modest as it may be -- is built to be resilient. Of its third-quarter sales of just over $3.1 billion, nearly 84% of it came from autoship customers who pay for recurring deliveries of pet food and related supplies, extending another growth trend. A year ago, only 80% of Chewy's revenue reflected subscription-based business. Two years ago that number was only 76.4%, up from 2022's comparison of 73.3%.

It matters simply because these customers cost less to keep. That's why the company's net profit margin has continued to widen at a faster clip than its revenue after swinging to a permanent profit back in 2023.

CHWY Profit Margin data by YCharts

Chewy is still not wildly profitable, but it's clear that given enough time the company could become far more profitable than the stock's 30% pullback from its mid-2025 peak suggests.

2. MercadoLibre

While you've likely heard of Chewy, there's a pretty good chance you've never heard of MercadoLibre (NASDAQ: MELI). There's good reason for that though. That is, it doesn't operate in the United States (at least not yet). Rather, MercadoLibre's operation is limited to Latin America, where it's quickly securing its place as the leading e-commerce player. It's often referred to as the Amazon of Latin America, in fact, in acknowledgement of all the different ways the company's secured its customer relationships. E-commerce, logistics, digital payments, and more are all in its wheelhouse.

And MercadoLibre is crushing it. Its third-quarter top line of $7.4 billion was up 39% year over year (and higher by 49% after adjusting for currency fluctuation), extending a long-standing growth trend that's apt to remain in place for a long, long while.

Simply put, MercadoLibre is in the right place at the right time with the right solutions.

In many ways, where North America was 20 years ago is where South America is now. Chief among these relevant similarities is the explosion of high-speed internet connectivity underway in this region right now. S&P Global Market Intelligence Kagan reports that Latin America's home-based fiberoptic broadband connections grew at an average annual pace of more than 40% during the 10 years ending in 2024.

Meanwhile, these consumers' adoption of smartphones is seeing similar growth. And as was the case here, it's not taking them long to discover the joys of easy online shopping. Indeed, industry research outfit eMarketer believes Latin America's e-commerce business grew by 12.2% in 2025, outpacing the worldwide industry's growth by about 50%, while Payments & Commerce Market Intelligence expects the region's e-commerce market to double in size between 2023 and 2027.

MercadoLibre shares are down 20% from highs reached early last year mostly because it spent more on a free-shipping promotion in the latter half of 2025 than investors were expecting. As was the case with Amazon, however, investors should eventually realize this short-term pain will be worth it in the long run.

3. PayPal

Finally, add PayPal (NASDAQ: PYPL) to your list of growth stocks to consider buying after Wall Street allowed its shares to tumble more than 80% from their pandemic-prompted 2021 peak.

The sell-off makes enough superficial sense. The COVID-19 contagion forced consumers to do practically all of their shopping online, spurring soaring usage of online payment solutions like PayPal's.

As could have been predicted though, the crowd plowing into PayPal stock around that time got more than a little ahead of itself. Then alternatives like cryptocurrency payment platforms and digital wallets like Apple Pay took center stage, leaving investors wondering if PayPal's best days were behind it.

They weren't. Despite more alternatives than ever before, consumers still love the original powerhouse in the online payment space. That's PayPal, which still enjoys control of nearly half of the online payment space (outside of China) just as it has for years.

It's still growing, too. Following a 7% year-over-year improvement in its third-quarter revenue, in fact, analysts' expectation of revenue growth of just under 5% for all of 2025 and less than 6% for the year now underway may underestimate what's actually in store.

That's particularly true in light of the recent unveiling of tech allowing the use of PayPal's payment service within Microsoft's chat-based Copilot artificial intelligence (AI) platform following a handful of other new AI-oriented offerings. Ditto for earnings, which are projected to grow at an even faster clip. In this vein, PayPal has already topped per-share earnings estimates for six straight quarters now.

The kicker: PayPal recently initiated dividend payments. While modest at a targeted 10% of its net profits, the move speaks volumes about the company's confidence in its own future.

So far none of this appears to have inspired bullish interest in PayPal stock, which is back within sight of multiyear lows made back in 2023. This may well be the year, however, Wall Street has no choice but to acknowledge the fact that PayPal's doing just fine despite all the pessimism that's been surrounding this stock since 2021.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Chewy, MercadoLibre, Microsoft, and PayPal. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short March 2026 $65 calls on PayPal. The Motley Fool has a disclosure policy.