13 New 4-Star Stocks This Week

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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star

. For the week ended April 10, 13 stocks saw their ratings change to 4 stars, while five joined the 78 US-listed names in 5-star territory.

The five new 4-star stocks with the largest market capitalization are:

• Verizon Communications VZ
• Intuit INTU
• Automatic Data Processing ADP
• Cadence Design Systems CDNS
• Cloudflare NET

The full list of new 4-star stocks can be found at the bottom of this story. All returns in this article are reported in the stock’s base currency, and all data is sourced from Morningstar Direct.

What Is the Morningstar Rating for Stocks?

The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its

—Morningstar’s estimate of its intrinsic worth—and its , which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.

The Latest Stock Valuation Changes

The Morningstar US Market Index rose 3.50% over the past week as of April 10, leaving the overall US stock market moderately undervalued, hovering at a 9% discount to its fair value estimate on a market cap-weighted basis.

Of the 829 US-listed stocks covered by Morningstar analysts:

• 42% are undervalued, 38% are fairly valued, and 20% are overvalued.
• 13 are newly undervalued.
• 31 are newly overvalued.
• Five moved from 4-star to 5-star ratings.
• Seven moved from 5-star to 4-star ratings.
• None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
• 24 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Verizon Communications

• Morningstar Rating: ★★★★
• Fair Value Estimate: $53.00
• Uncertainty Rating: Medium

Following a 5.37% loss over the past week, telecom services firm Verizon saw its Morningstar Rating move to 4 stars from 3. Verizon has gained 17.54% over the past three months and 14.54% over the past year. The large-value stock has a narrow economic moat. Verizon is trading at a 13% discount to its fair value estimate of $53 per share, with an Uncertainty Rating of Medium.

Intuit

• Morningstar Rating: ★★★★
• Fair Value Estimate: $495.00
• Uncertainty Rating: High

Software application firm Intuit dropped 16.66% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 45.57% over the past three months and 38.71% over the past year. The stock’s price is 29% below its fair value estimate of $495 per share, with an Uncertainty Rating of High. The large-core stock has a narrow economic moat.

Automatic Data Processing

• Morningstar Rating: ★★★★
• Fair Value Estimate: $231.00
• Uncertainty Rating: Medium

Following a 7.46% loss over the past week, software application firm ADP saw its Morningstar Rating move to 4 stars from 3. ADP has lost 28.45% over the past three months and 33.77% over the past year. The large-value stock has a narrow economic moat. ADP is trading at an 18% discount to its fair value estimate of $231 per share, with an Uncertainty Rating of Medium.

Cadence Design Systems

• Morningstar Rating: ★★★★
• Fair Value Estimate: $330.00
• Uncertainty Rating: High

Software application firm Cadence dropped 4.69% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 18.84% over the past three months and is up 4.58% over the past year. The stock’s price is 19% below its fair value estimate of $330 per share, with an Uncertainty Rating of High. The mid-growth stock has a wide economic moat.

Cloudflare

• Morningstar Rating: ★★★★
• Fair Value Estimate: $235.00
• Uncertainty Rating: Very High

Software infrastructure firm Cloudflare lost 21.12% over the past week, shifting its Morningstar Rating to 4 stars from 3. Cloudflare has dropped 8.64% over the past three months and has climbed 58.28% over the past year. The stock is trading at a 29% discount to its fair value estimate of $235 per share, with an Uncertainty Rating of Very High. Cloudflare is a mid-growth company with a wide economic moat.