The Australian sharemarket has been volatile over the past month as geopolitical conflict and rising interest rates create uncertainty for investors.
But even when markets look murky, ASX investors hunting for a bargain can still find undervalued stocks hiding in plain sight.
An undervalued ASX stock is one that is trading below fair value. This could be due to investors overselling, taking gains off the table after strong price surges, or another short-term fundamental factor causing a temporary sharp pullback.
It's worth remembering that just because an ASX stock is cheap doesn't mean it is a bargain or undervalued. Some cheaper stocks have lower valuations for valid reasons, whether it's slowing growth or intensifying competition.
Here are three ASX stocks that I think could fit the bill.
Image source: Getty Images
Zip Co Ltd (ASX: ZIP)
Zip shares have faced significant headwinds over the past six months. These include pressure from short sellers in late 2025 and from investors taking their gains after a huge mid-year price rally in 2025. The ASX company posted a strong half-year FY26 result, but seemingly missed high expectations. The company's outlook is strong, though, with solid consecutive financial results over the past few quarters and strong growth plans in place. The consensus is that the shares are now oversold and undervalued. Analysts are tipping a maximum upside of 238% to $5.27 over the next 12 months.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster shares have crashed 77% since peaking at an all-time high in August last year amid concerns about slowing growth and margin pressure. Recent concerns about the latest Middle East conflict and its impact on shipping costs have pushed the share price to a multi-year low. But the benefit of the company's business model is that it is a pure-play online retailer with a long-term strategy. It's focused on capturing market share in a fragmented industry. Despite trailing sentiment, its revenue momentum has remained strong. The business even reported sales growth of close to 20% in the first half of FY26. Analysts are tipping the ASX stock to climb up to 260% to $24 over the next 12 months.
Catalyst Metals Limited (ASX: CYL)
The Western Australian gold producer announced a significant new high-grade discovery at its Plutonic Gold Belt in January. The ASX gold stock also delivered impressive first-half FY26 financial results last month. This represents a long period of operational consistency and organic growth. The miner has a good growth strategy going forward, too, including expectations of production increase towards the latter half of FY26. Analysts tip a maximum target price of $20.40, which implies a potential 206.31% upside at the time of writing.
