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Ricardo plc is trading at £5.32, well below its estimated fair value of £9.05, indicating it is significantly undervalued based on cash flows. Analysts forecast revenue growth at 4.8% per year, outpacing the UK market's 3.5%. Expected to become profitable within three years with earnings projected to grow by 54.92% annually, Ricardo offers good relative value compared to peers despite a low forecasted return on equity of 14.3%.

• Our comprehensive growth report raises the possibility that Ricardo is poised for substantial financial growth.

• Click here to discover the nuances of Ricardo with our detailed financial health report.

Sage Group

Overview: The Sage Group plc, with a market cap of £10.85 billion, provides technology solutions and services for small and medium businesses in the United States, the United Kingdom, France, and internationally.

Operations: Revenue segments for Sage Group are as follows: Europe: £595 million, North America: £1.01 billion, and United Kingdom & Ireland: £488 million.

Estimated Discount To Fair Value: 33.8%

Sage Group is trading at £10.86, significantly below its estimated fair value of £16.41 based on discounted cash flows. Recent revenue growth, including a 9% increase in Q3 2024 to £585 million, underscores strong performance driven by the Sage Business Cloud portfolio. Despite high levels of debt, earnings are forecast to grow at 14.38% annually, outpacing the UK market's average and reflecting robust financial health and potential for future profitability amidst strategic partnerships and product enhancements.

• In light of our recent growth report, it seems possible that Sage Group's financial performance will exceed current levels.

• Delve into the full analysis health report here for a deeper understanding of Sage Group.

Key Takeaways

• Navigate through the entire inventory of 58 Undervalued UK Stocks Based On Cash Flows here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LSE:MOON LSE:RCDO and LSE:SGE.

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