Five U.S. Stocks to Watch in Early 2026: Value Plays and Turnaround Stories

Staffing Sector Shows Signs of Recovery After Years of Decline

Kforce Inc. (KFRC) has weathered a challenging period as the job market softened and consulting demand slowed, but recent performance suggests the worst may be behind us. The company specializes in deploying technical professionals and accounting specialists to Fortune 500 enterprises, managing a network of roughly 18,000 consultants annually.

The narrative shifted in November 2025 when Kforce surprised investors with stronger-than-expected third-quarter results. While revenues dipped 5.9% year-over-year to $332.6 million, earnings came in at $0.63, beating consensus by $0.06. More importantly, both the Technology and Finance & Accounting divisions showed improvement, particularly as the Technology segment appeared to reach its bottom and stabilized through the quarter.

Looking ahead, the momentum appears sustainable. Analysts have revised estimates higher for both 2025 and 2026 in recent weeks. The 2025 consensus now stands at $2.13 (up from $2.06), though still representing a 20.5% decline year-over-year. However, 2026 turns the corner with expected earnings of $2.28—a 7% year-over-year gain after three consecutive years of declines.

From a valuation standpoint, Kforce trades at just 14.7x forward earnings and 0.4x price-to-sales. Both metrics suggest meaningful discount relative to historical averages. Add to this a $100 million share buyback authorization and a 5% dividend yield, and the risk-reward appears balanced for value-oriented investors seeking a turnaround play in a temporarily depressed sector.

Outdoor Living Products Manufacturer Faces Persistent Headwinds

Trex Company (TREX) paints a starkly different picture despite its broad product portfolio spanning wood-alternative decking, railing systems, pergolas, spiral stairs, fencing solutions, lattice work, cornhole products meeting regulation size standards, and outdoor furniture. The company maintains an extensive distribution network across more than 6,700 retail outlets worldwide.

Third-quarter 2025 results disappointed. Trex reported earnings of $0.51 versus the $0.56 consensus, marking the first miss in three years. While railing sales surged 22.1% in revenues (reaching $285 million), the core decking business continued struggling. Management attributed weakness to persistently soft remodeling demand, signaling expectations for this trend to extend into the slower fourth quarter.

The earnings disappointment triggered a cascade of estimate cuts. Seven analyst revisions came through for 2025, pushing the full-year consensus down to $1.83 from $2.21—a 12.4% reduction. For 2026, eight estimates dropped in the same period, with the consensus falling to $1.66 from $2.51 (a 9% decline). None of the covered analysts have raised estimates in the past 60 days, underscoring the cautious sentiment.

At 19.4x forward earnings, Trex doesn’t offer the discount valuation that might otherwise attract bargain hunters. Without dividend income to cushion underperformance, investors eyeing the home remodeling space may want to monitor conditions more closely before committing capital in early 2026.

Three Market Leaders Trading Below Intrinsic Value

Beyond these specific names, three other category-leading franchises merit attention as potential rebound candidates heading into 2026. Each faced headwinds in 2025 despite maintaining fortress balance sheets and proven business models.

The Trade Desk (TTD) collapsed nearly 70% from its highs as software sector concerns around AI disruption swept indiscriminately across the space. Yet the independent demand-side platform business remains fundamentally intact. TTD connects advertisers to digital inventory across open internet, connected TV, streaming platforms, mobile, audio, and display channels. Its independence from “walled gardens” like Google and Meta provides structural advantages as advertisers demand transparency and cross-platform reach.

The company’s Unified ID 2.0 framework positions it well as third-party cookies phase out and privacy regulations tighten. While growth moderated from the 30-50% annual expansion of earlier years, projections call for high-teens revenue growth and roughly 20.4% annual earnings compounding through the next three to five years. At 21.4x forward earnings, the valuation represents a dramatic compression from the premium multiples this quality business once commanded.

Blackstone Group (BX) experienced significant selling pressure tied to private credit concerns following the First Brands Group collapse. Yet systematic analysis shows the episode appears largely isolated rather than symptomatic of broader market dysfunction. Default rates haven’t meaningfully accelerated, and underwriting discipline among tier-one managers remains sound.

Fundamentally, Blackstone sits atop the alternatives world with unmatched scale in private equity, real estate, infrastructure, hedge funds, and private credit. Its diversified platform and long-duration capital base position it to benefit as institutional investors continue rotating toward alternatives. At 29x forward earnings—modestly above the five-year median of 25.6x—valuation looks more reasonable than historical norms. Revenue is projected to grow 26% next year with earnings compounding at 22.1% annually, supporting renewed analyst confidence reflected in a Rank #2 (Buy) designation.

Salesforce (CRM) fell out of favor as capital rotated toward pure-play AI infrastructure names. This rotation overlooked how deeply embedded Salesforce products sit within enterprise workflows and the substantial optionality AI creates across its platform. The company commands one of enterprise software’s richest datasets spanning sales, marketing, service, and customer engagement.

Tools like Einstein, Data Cloud, and Agentforce promise to enhance productivity and decision-making as organizations embed AI deeper into operations. At 22.6x forward earnings with 15% consensus earnings growth projected through the next three to five years, valuation appears attractive relative to Salesforce’s market leadership and improving unit economics. The company has beaten earnings in every quarterly report, most recently by 14%, signaling execution strength despite market skepticism. Technicals suggest an early-stage base formation that could presage a meaningful rally as sentiment normalizes.

The Broader Investment Thesis for 2026

All three opportunity names share a common setup entering the new year: market-leading competitive positions, reset valuations after significant drawdowns, and intact long-term growth drivers. This year’s underperformance appears driven more by sentiment rotation and narrative concern than by fundamental business deterioration. While volatility always remains possible, the combination of durable franchises, improved valuation entry points, and visible earnings visibility creates an appealing risk-reward profile for patient capital willing to look past 2025’s weakness.