…..simply buying the undervalued stock
It may or may not be. But lets assume that it is. If the stock is very much overvalued, then there is a very good probability that the price of that stock will fall back to a more reasonable level at some point. Short selling it will take advantage of that fall in price and result in a gain for the short seller.
However, the short sale can be risky because of Newtons 1st law. A body in motion tends to stay in motion unless acted upon by an external force. A stock that has been rising in price will tend to continue rising in price. If you do not believe that, go back and look at the charts of the internet stocks of 1999. They were overvalued by many factors, but they kept on rising. Short sellers, if they can act in coordination, can sometimes make Newtons 1st law work for them, by supplying the external force. They do that by flooding the market with stock and overwhelming demand with supply. The SEC takes a dim view of that tactic, and has instituted rules that work against short sellers in the securities markets. In the commodities markets, those rules do not exist and short selling can function more effectively.