4 SPY Stocks Down 40%-60%, But EPS Keeps Rising

These 4 stocks are down 40%-60% from its highs.

But, EPS keeps going up every quarter for each of them too.

Here's the 4 most undervalued stocks in $SPDR S&P 500 ETF Trust(SPY)$ :

1st stock is:

$Fair Isaac(FICO)$ its down almost 40% right now. It has never printed a loss quarter and eps keeps accelerating.

Honestly, it shouldn't even be down this year. It actually makes no sense to me.

$FICO

-Fiscal Q3 revenue $674M, up 26%.

-GAAP EPS $10.45, up 41%. Non GAAP $12.18, up 42%.

-$370M of free cash flow in a single quarter.

-Platform ARR up 62% to $413M, now bigger than legacy for the first time.

-Repurchased $1.96B of stock in the quarter.

Yes, its very expensive this stock. So here's 3 more that are cheaper with a lower price:

The other 3 are:

$AppLovin Corporation(APP)$

-Revenue $1.92B last quarter, up 53%.

-Net income $1.27B. GAAP EPS $3.76 vs $2.39 a year ago.

-The quarter before that: $3.56 vs $1.67.

-That is EPS up 113% and 57% back to back.

-84% adjusted EBITDA margin. Almost nobody at this scale prints that.

$Intuitive Surgical(ISRG)$

-Q2 revenue $2.89B, up 19%.

-Net income $818M vs $658M. GAAP EPS $2.31 vs $1.84.

-Non GAAP EPS $2.80, up 28%.

-Procedures up 16%. Nearly 13,000 systems installed globally.

-85% of revenue is recurring. This is a razor and blade machine.

$Palantir Technologies Inc.(PLTR)$

-Revenue $1.94B, up 93%. Fastest growth in company history.

-Net income $1.07B. GAAP EPS $0.41 vs $0.13.

-Tripled. Not adjusted. GAAP.

-47% GAAP operating margin. Rule of 40 score of 155.

-Raised FY26 guidance to $8.15B, up 82%.

So why are they all down:

It is not the earnings. Every one of these grew EPS double digits or better last quarter.

It is multiple compression.

Investors are paying less for the same dollar of profit than they were a year ago.

Three forces doing it:

Higher yields punish long duration growth. When the discount rate goes up, cash flows five years out are worth less today. These are exactly the names that get repriced first.

Rotation. Capital left software and rushed into memory and hardware.

$SanDisk Corp.(SNDK)$ is up 585% YTD.

$Micron Technology(MU)$ is up 230%. That money came from somewhere.

Expectations got too high. When a stock prices in perfection, an in line quarter is a sell signal.

Then the name specific stuff:

$APP: revenue came in light and management admitted model improvement was slower in the quarter. Short seller reports still hang over it.

$ISRG: US procedure growth moderated and China stayed difficult.

$PLTR: still over 40x forward sales even after the drawdown.

$FICO: mortgage origination is 62% of Scores revenue. Concentrated, and VantageScore competition is the bear case.