Over the past 12 months, the S&P 500 rallied 35% as investors bought more stocks in anticipation of milder inflation and lower interest rates. But with the benchmark index now hovering near its record high and trading at a historically high forward price-to-earnings (P/E) ratio of 23, some investors might be reluctant to load up on new stocks.

Yet there are plenty of promising stocks still trading at discount valuations in this frothy market. I believe value-seeking investors can scoop up more shares of Alibaba (BABA -1.63%), Celsius (CELH 6.16%), and Opendoor (OPEN 1.68%) before the bulls spot their phenomenal growth potential again.

Image source: Getty Images.

1. Alibaba

Alibaba is the largest e-commerce and cloud services company in China. It also operates brick-and-mortar stores, logistics services, and digital media services. It was once considered a high-growth bellwether of China's economic growth, but it grappled with tough regulatory, competitive, and macro headwinds over the past few years.

In 2021, China's antitrust regulators hit Alibaba's e-commerce business with a record fine and tighter restrictions, which eroded its defenses against tough competitors like PDD and JD.com. China's economic slowdown, which was exacerbated by its draconian lockdowns during the pandemic's height, further throttled the growth of its e-commerce and cloud businesses.

But over the past year, Alibaba's growth stabilized and accelerated again. The company offset the slower growth of its domestic e-commerce business by expanding its overseas marketplaces. It provided more logistics services to third-party customers, and its cloud business grew again as the artificial intelligence (AI) market expanded. China also recently rolled out new stimulus measures to kick-start its stagnant economy, and those tailwinds should boost its e-commerce and cloud revenues again. That's why Alibaba's stock rallied nearly 50% this year -- but it remains more than 60% below its all-time high.

From fiscal 2024 to fiscal 2027 (which ends in March 2027), analysts expect Alibaba's revenue to grow at a compound annual growth rate (CAGR) of 8%, as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increase at a CAGR of 6%. Its stock looks like a bargain at just seven times next year's adjusted EBITDA, but its valuations should rise again if investors rotate back toward China's best blue chip stocks.

2. Celsius

Celsius owns the third largest energy drink brand in the U.S. after Red Bull and Monster. It carved out its own niche by blending natural ingredients like green tea, ginger, guarana seed extract, and amino acids in its sugar-free drinks to attract health-conscious consumers. It also claimed its drinks had "thermogenic properties" which helped people burn more calories.

Celsius experienced a major recovery and growth spurt under John Fieldy, who took over as its CEO in 2018. Fieldy drove the company to rebrand and repackage its drinks, target health-oriented businesses like gyms and health supplement shops, and sell its drinks in the health and beauty aisles of traditional supermarkets.

In 2022, PepsiCo (NASDAQ: PEP) acquired an 8.5% stake in Celsius and became its North American distribution partner. Celsius also sold more drinks on Amazon and signed a distribution deal with Japan's Suntory to sell its drinks in the U.K., Ireland, and Canada earlier this year.

Celsius' stock declined more than 40% year to date as investors fretted over its slowing growth and domestic market share losses. But from 2023 to 2026, analysts still expect its revenue to grow at a CAGR of 15% as its adjusted EBITDA rises at a CAGR of 18%. Its hypergrowth days might be over, but it still looks cheap at 17 times next year's adjusted EBITDA. It could head a lot higher if it maintains its current growth rates and continues expanding into more overseas markets.

3. Opendoor

Opendoor operates an online "iBuyer" (instant buyer) platform, which streamlines home sales by making instant cash offers for houses, repairing those properties on its own, and relisting them for sale on its own marketplace. But that's a capital-intensive business model that requires interest rates to be low, the housing market to be healthy, and for its own AI algorithms to calculate the correct values of its purchased properties.

Those challenges caused Zillow and Redfin to shut down their own iBuying platforms as interest rates started rising in 2022. Opendoor bought fewer houses as those headwinds intensified, but its adjusted EBITDA margin still slipped from positive 0.7% in 2021 to negative 1.1% in 2022 and negative 9% in 2023.

Opendoor's stock plummeted 90% over the past three years as its growth stalled out and its losses widened. For 2024, analysts expect its revenue to decline another 26%, with a negative adjusted EBITDA margin of 3.5%.

But from 2024 to 2026, they expect its revenue to grow at a CAGR of 35% as its adjusted EBITDA turns positive by the final year. Based on those expectations, Opendoor looks dirt cheap at less than one times this year's sales. As interest rates continue to decline, the iBuying market should warm up again and drive more investors back to Opendoor's stock.