When InvestingPro's fair value models identified Valero Energy (NYSE:VLO) as significantly undervalued in April 2025, the stock was trading at $105.18. Six months later, this analysis has proven remarkably accurate, with VLO shares reaching $158.02, delivering a 62% return for investors who followed the signal. This success story demonstrates the power of data-driven valuation analysis in identifying market opportunities, similar to those currently featured on our most undervalued list.
Valero Energy, one of North America's largest independent petroleum refiners, showed strong fundamentals when InvestingPro's models flagged the opportunity. With revenues of $122.3 billion and EBITDA of $5.16 billion, the company's operational excellence and advantaged Gulf Coast refining footprint suggested significant upside potential despite the stock's volatile performance in early 2025.
The fair value analysis proved particularly timely, as VLO had experienced substantial price swings in the preceding months, ranging from -12% to +9% monthly returns. InvestingPro's models, which aggregate multiple valuation methodologies, identified a 47.3% upside potential - a projection that was ultimately exceeded as the stock climbed higher through summer and fall 2025.
Recent developments have validated the original thesis, with Valero beating Q2 2025 earnings estimates and receiving multiple analyst upgrades. The company's strong operational performance, coupled with its strategic position in both traditional refining and renewable fuels, has attracted increased institutional interest. Current fundamentals remain robust, with the company maintaining healthy margins and strong cash flow generation.
InvestingPro's fair value methodology combines multiple valuation approaches, including discounted cash flow analysis, comparable company metrics, and market-based factors. This comprehensive approach helps identify opportunities where market prices significantly diverge from intrinsic value, as demonstrated in the Valero case.
For investors seeking similar opportunities, InvestingPro continues to identify undervalued and overvalued stocks across global markets. The platform's proven track record in fair value analysis, combined with real-time financial data and expert insights, provides investors with powerful tools for making informed investment decisions. Learn more about InvestingPro to access current fair value analyses and discover potentially mispriced stocks before the market catches up.