In This Article:
Over the last 7 days, the United States market has risen by 4.1%, contributing to a 7.9% increase over the past year, with earnings anticipated to grow by 14% per annum in the coming years. In this context of upward momentum and growth expectations, identifying stocks that are estimated to be significantly below their intrinsic value can present valuable opportunities for investors seeking potential long-term gains.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Lantheus Holdings (NasdaqGM:LNTH) | $103.64 | $204.56 | 49.3% |
| Modine Manufacturing (NYSE:MOD) | $79.09 | $155.53 | 49.1% |
| Ready Capital (NYSE:RC) | $4.42 | $8.65 | 48.9% |
| Shift4 Payments (NYSE:FOUR) | $80.63 | $159.28 | 49.4% |
| Bel Fuse (NasdaqGS:BELF.A) | $66.40 | $130.61 | 49.2% |
| Veracyte (NasdaqGM:VCYT) | $32.14 | $63.15 | 49.1% |
| Elastic (NYSE:ESTC) | $82.12 | $160.34 | 48.8% |
| Reddit (NYSE:RDDT) | $112.25 | $223.76 | 49.8% |
| BigCommerce Holdings (NasdaqGM:BIGC) | $5.25 | $10.40 | 49.5% |
| CNX Resources (NYSE:CNX) | $29.06 | $57.83 | 49.7% |
Let's explore several standout options from the results in the screener.
Palo Alto Networks
Overview: Palo Alto Networks, Inc. offers cybersecurity solutions globally and has a market cap of approximately $111.44 billion.
Operations: The company generates revenue from its Security Software & Services segment, amounting to $8.57 billion.
Estimated Discount To Fair Value: 26.6%
Palo Alto Networks is trading at US$176.04, significantly below its estimated fair value of US$239.68, suggesting it might be undervalued based on cash flows. Despite a decrease in profit margins from last year, the company's earnings are forecast to grow faster than the US market at 17.7% annually. Recent strategic partnerships and product innovations enhance its cybersecurity offerings, potentially supporting future revenue growth above market expectations at 12.8% per year.
Overview: Reddit, Inc. operates a digital community both in the United States and internationally, with a market cap of $19.39 billion.
Operations: The company's revenue is primarily generated from its Internet Information Providers segment, amounting to $1.30 billion.
Estimated Discount To Fair Value: 49.8%
Reddit is trading at US$112.25, significantly below its estimated fair value of US$223.76, indicating potential undervaluation based on cash flows. Despite recent insider selling and a volatile share price, Reddit's revenue growth is projected to outpace the market at 21.4% annually, with profitability expected within three years. Recent partnerships enhancing data insights and advertising capabilities could support this growth trajectory, although current return on equity forecasts remain modest at 15.3%.