3 Stocks Dropped 50% or More to Buy Right Now

• GXO is a logistics company that is the future of e-commerce warehousing.

• Zebra Technologies is a data capture company poised for a cyclical recovery, with an AI-powered product update in progress.

• ON Semiconductor is highly valued, with growth prospects coming from its exposure to electric vehicles, industrial automation and artificial intelligence data centers.

• 10 stocks we like better than GXO Logistics ›

There are many investing axioms that will help guide your stock selection. Some of them are classics. A Warren Buffett classic says: “It is much better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Let’s take a closer look at three potentially wonderful companies with shares that are not only trading at a fair price, but are currently more than 50% below their all-time highs.

There is obviously a reason for the declines and there is still downside risk for these companies. But that said, there’s also substantial upside potential from here, and the stock appears to be a great value in terms of risk-reward. Here’s why.

Management claims GXO (NYSE: GXO) is the “world’s largest exclusive contract logistics provider” and a leader in implementing productivity-enhancing technology (such as automation, robots and smart warehousing solutions) for its customers. It should be a good growth market as the increasing complexity of warehouse technology and the benefit of logistics outsourcing push the market towards solution providers like GXO.

That said, the company has had a tough couple of years, as organic revenue growth has slowed due to an inevitable pullback in e-commerce warehouse spending following the previous boom created by lockdowns, during which companies rushed to boost investment.

The changing dynamics of organic revenue growth is clearly demonstrated in the table. However, the company appears to have overcome the worst and, with organic revenue growth of 4.1% in the first nine months of 2025, is on track to meet its 2025 targets.

Data source: GXO Logistics.

Wall Street analysts estimate that GXO will generate $341 million in free cash flow (FCF) next year, putting the company at a forward price/FCF multiple of 17.7 times FCF. Assuming a 20x multiple for a mature industrial company (a conservative assumption, as GXO clearly has good long-term growth prospects), the consensus target of nearly $65 (implying a 23.6% upside) looks realistic.

Zebra technologies (NASDAQ: ZBRA) is an industry leader in automatic identification and data capture. In layman’s terms, this refers to barcode readers, RFID devices, mobile computers, and specialized printers commonly used in the retail (including e-commerce warehousing), logistics, and manufacturing industries.

Like GXO, Zebra saw a spike in spending during lockdowns and then suffered a drop in sales as customers reduced their stock after stockpiling inventory during the boom. Additionally, the retail sector has been negatively affected by relatively high interest rates and tariffs in 2025.

Still, these factors won’t last forever and Zebra’s long-term growth prospects remain positive as its solutions enable customers to capture information digitally. Additionally, Zebra is incorporating artificial intelligence (AI) solutions that will enable device users to get immediate answers and actionable insights into their daily workflows. These AI-powered solutions could drive a refresh cycle in the future and increase the value of their overall solutions for customers.

Management expects $800 million in FCF in 2025, and Wall Street forecasts $888 million in 2026, putting Zebra at less than 15 times forward FCF in 2026. As such, Wall Street’s price target of $358 (implying a 37% upside) seems reasonable.

The investment case for IN semiconductors (NASDAQ: ON) is based on two ideas: 1. The key end markets for its smart sensing and power chips are electric vehicles (EV), and 2. The industrial sector (including industrial automation, energy infrastructure, and AI data centers) has experienced a cyclical slowdown in recent years.

As such, ON Semiconductor could be primed for a cyclical recovery that is not yet reflected in the share price. At the same time, its long-term secular growth prospects (which do not depend on the business cycle) appear assured.

The cyclical weakness in its EV end markets is due to a slowdown in EV spending following increased investment during COVID-19-related lockdowns, as well as relatively high interest rates that are restraining EV sales growth. However, electric vehicles remain the growth area of ​​the automotive market and, while car manufacturers are shelving their previous development plans, they are shifting towards investments in more targeted and affordable models. Consequently, spending on electric vehicles should grow in the future.

As for the industrial sector, there is little discussion, but American manufacturing has been in contraction territory for most of the last few years, mostly due to a major inventory correction as customers used up previously high inventories built up during the supply chain crisis that hit the economy after lockdowns ended.

History suggests it will fade over time, leading to a rebound in growth in ON Semiconductor’s industrial markets, supported by growth momentum from its partnership with NVIDIA about the new generation of data centers. Trading at less than 16 times estimated 2025 FCF, the stock appears to be an excellent value.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has posts and recommends Nvidia and Zebra Technologies. The Motley Fool recommends GXO Logistics and ON Semiconductor. The Motley Fool has a disclosure policy.

Three Stocks Dropped 50% or More to Buy Right Now was originally published by The Motley Fool