3 Top Ranked, Underfollowed Stocks That are Surging (FLXS, ALGT, HSY)

A notable shift has been unfolding beneath the surface of the market in recent months, one that many investors may have overlooked. While the major indexes have remained flat or pushed modestly higher, leadership has quietly rotated. Outside of a narrow group of AI-linked names, much of the AI ecosystem, along with the Magnificent 7 have largely paused after extended runs.

This type of consolidation among market leaders is both typical and healthy. More importantly, it has coincided with a broadening of the rally, as the remaining 493 members of the S&P 500 increasingly participate in the advance. Historically, expanding market breadth has been associated with more durable bull markets, suggesting the current backdrop remains supportive for stock market investors.

Against this improving landscape, a number of underfollowed stocks are beginning to stand out. Companies with strong Zacks Ranks, reasonable valuations, and constructive price momentum are quietly moving higher without attracting widespread attention. Flexsteel Industries (FLXS), Allegiant Air (ALGT), and Hershey (HSY) fit that description and deserve a closer look from investors seeking opportunities beyond the market’s most crowded trades.

Flexsteel Industries: Stock Forming Compelling Technical Pattern

Flexsteel Industries is a well-established manufacturer and importer of residential furniture, known for its durable seating products and broad distribution network spanning retail partners, e-commerce channels, and direct sales. While furniture demand can be cyclical and closely tied to housing and consumer spending trends, the company has spent the past several years streamlining operations, while the housing industry has quietly shown evidence of a rebound.

After a difficult stretch for the broader home furnishings space, the industry is off to a strong start in 2026, materially outperforming the market and currently ranking in the top 18% of the Zacks Industry Rank (43 out of 243 groups). Flexsteel itself carries a Zacks Rank #1 (Strong Buy), supported by meaningful upward revisions to earnings expectations. Estimates have climbed 15.5% for the current year and 11.5% for next year over just the past 30 days, a signal that analysts are growing increasingly confident in the company’s outlook.

Valuation remains reasonable. Shares trade at approximately 13.6x forward earnings, roughly in line with the company’s long-term average, which leaves room for potential multiple expansion if the industry recovery continues and execution remains solid.

Technically, the stock is exhibiting constructive behavior. Following a substantial earnings beat that triggered a sharp gap higher, shares have consolidated into what appears to be a high-and-tight flag pattern. This formation is often associated with continuation moves and suggests the potential for further upside should the stock break decisively above its recent range.

Allegiant: Shares Climb Following Earnings

Allegiant Air is an ultra-low-cost carrier focused on connecting underserved cities to popular leisure destinations. The airline has carved out a defensible niche within the travel industry by emphasizing point-to-point routes, disciplined capacity growth, and ancillary revenue streams that help support margins even in a competitive pricing environment.

The airline industry itself has started 2026 on solid footing, ranking in the top 12% of the Zacks Industry Rank (28 out of 243 groups). Allegiant has been a clear beneficiary of this strength, with analysts raising earnings estimates by 21.3% for the current year and 10.5% for next year. These upward revisions support the company’s Zacks Rank #1 (Strong Buy) rating and reinforce improving confidence in its near-term trajectory.

Despite the stronger outlook, valuation remains attractive. Shares trade at roughly 13.8x forward earnings, while EPS is projected to expand at an impressive 51.3% annual rate over the next three to five years. That combination results in a PEG ratio of just 0.27, signaling that the stock may still be undervalued relative to its growth profile.

From a technical perspective, Allegiant is displaying a setup similar to other emerging leaders. After delivering a major earnings beat that sparked a sharp gap higher, the stock has consolidated into what appears to be a high-and-tight flag pattern, a formation often associated with institutional accumulation and potential continuation higher if the breakout confirms.

Hershey: Stock Rebounding from Lows

The Hershey Company remains one of the most entrenched consumer franchises in the United States, with a dominant position in confectionery and a portfolio of iconic brands that command pricing power and shelf space. Despite that strength, the stock experienced a sharp correction between 2023 and last year as investors rotated away from defensive names and grappled with margin pressures tied to input costs.

That backdrop is beginning to shift. Shares have rebounded from their lows and are gaining momentum as capital rotates toward diversification beyond the market’s crowded themes. In addition, Hershey recently delivered a strong earnings beat, prompting meaningful upward revisions to profit forecasts and earning the company a Zacks Rank #1 (Strong Buy).

Earnings estimates have climbed across multiple timeframes, with projections rising 17.4% for this year and 16.4% for next year. Those increases have occurred consistently over the past 60 days, 30 days, and again in the last week, signaling strengthening analyst conviction.

Technically, the setup mirrors the constructive patterns seen in other emerging leaders. Following its earnings-driven gap higher, Hershey has consolidated into what appears to be a high-and-tight flag formation.

Should Investors Buy Shares in HSY, ALGT and FLXS?

A common theme connects these three stocks: each is emerging from a prolonged period of underperformance just as market leadership begins to broaden. While AI and mega-cap technology names captured the bulk of investor attention over the past year, many fundamentally sound businesses were quietly left behind. That dynamic now appears to be reversing.

With a resilient economic backdrop and improving earnings outlooks, investors are increasingly rotating toward durable companies with reasonable valuations and strengthening price momentum. Flexsteel, Allegiant, and Hershey may lack the headline appeal of tech, but their entrenched market positions and rising analyst conviction suggest they are worth serious consideration. For investors seeking opportunities beyond the market’s most crowded trades, these underfollowed names could offer attractive upside as the rally continues to widen.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research