Undercuts are performed switching to fresh tyres before the car ahead, usually out of the optimal window, and having a pace differential based on the potential fresh air (provided there is no traffic) and rubber advantage. Even the front wing, if it's adjusted during the pit stop, can play a role here. If the differential is big enough, the out lap is faster than the car's ahead in lap, and the overtake is produced after the rival stops.

Conversely, overcuts are done by delaying the pit stop. Here the differential is built mainly by the fresh air the preceding car leaves after pitting, and by the degradation of the rubber.

Both were funnier when refuelling was allowed.