In This Article:
Amidst the backdrop of uncertainty surrounding U.S. trade policies, European markets have experienced mixed results, with the STOXX Europe 600 Index snapping a ten-week streak of gains. Despite these challenges, opportunities may exist for investors seeking undervalued stocks in Europe, as some equities are estimated to be trading significantly below their intrinsic value. Identifying such stocks often involves looking at companies with strong fundamentals that have been overlooked or mispriced due to broader market concerns.
Top 10 Undervalued Stocks Based On Cash Flows In Europe
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Sword Group (ENXTPA:SWP) | €33.00 | €65.34 | 49.5% |
| Vimi Fasteners (BIT:VIM) | €0.965 | €1.91 | 49.4% |
| Airbus (ENXTPA:AIR) | €163.00 | €321.97 | 49.4% |
| Telefonaktiebolaget LM Ericsson (OM:ERIC B) | SEK83.12 | SEK165.50 | 49.8% |
| Wienerberger (WBAG:WIE) | €34.58 | €68.85 | 49.8% |
| TF Bank (OM:TFBANK) | SEK368.00 | SEK720.43 | 48.9% |
| JOST Werke (XTRA:JST) | €50.30 | €98.63 | 49% |
| Star7 (BIT:STAR7) | €6.15 | €12.29 | 50% |
| Neosperience (BIT:NSP) | €0.54 | €1.06 | 49% |
| Cavotec (OM:CCC) | SEK17.15 | SEK33.80 | 49.3% |
Let's review some notable picks from our screened stocks.
Sword Group
Overview: Sword Group S.E. is a global provider of IT and software solutions with a market capitalization of €312.43 million.
Operations: The company's revenue is derived from its IT and software services across three primary regions: Belux (€104.26 million), Switzerland (€105.75 million), and the United Kingdom (€88.88 million).
Estimated Discount To Fair Value: 49.5%
Sword Group is trading at €33, significantly below its estimated fair value of €65.34, presenting a compelling case for undervaluation based on discounted cash flow analysis. The stock is priced 49.5% under this fair value estimate and trades favorably compared to peers and the industry. While earnings are projected to grow at 17.3% annually, surpassing the French market's growth rate, revenue growth remains moderate at 13.5%. However, its dividend yield of 5.15% lacks coverage by free cash flows.
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Our growth report here indicates Sword Group may be poised for an improving outlook.
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Click to explore a detailed breakdown of our findings in Sword Group's balance sheet health report.
USU Software
Overview: USU Software AG, with a market cap of €228.83 million, offers software and service solutions for IT and customer service management both in Germany and internationally through its subsidiaries.
Operations: The company generates revenue through its Product Business segment, which accounts for €90.33 million, and its Service Business segment, contributing €41.93 million.