As the U.S. stock market takes a breather from its recent rally, investors are keeping a close eye on the upcoming jobs report and potential policy shifts that could impact economic growth. Amidst this cautious optimism, identifying undervalued stocks becomes crucial, as these opportunities can offer significant potential for growth when market conditions stabilize.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
Overview: Tenable Holdings, Inc. offers cyber exposure solutions across various regions including the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan, with a market cap of approximately $5.13 billion.
Operations: The company's revenue primarily comes from its Security Software & Services segment, generating $877.60 million.
Estimated Discount To Fair Value: 36.1%
Tenable Holdings appears undervalued, trading 36.1% below its estimated fair value of US$68. The company reported third-quarter sales of US$227.09 million, up from US$201.53 million a year ago, with a reduced net loss of US$9.21 million compared to US$15.57 million previously. Despite past shareholder dilution and slower revenue growth forecasts at 9.3% annually, Tenable is expected to become profitable within three years, enhancing its investment appeal based on cash flows.
Overview: The Clorox Company manufactures and markets consumer and professional products globally, with a market cap of approximately $20.74 billion.
Operations: The company's revenue segments include Health and Wellness at $2.68 billion, Household at $2.07 billion, Lifestyle at $1.37 billion, and International at $1.15 billion.
Estimated Discount To Fair Value: 35.2%
Clorox is trading at US$169.74, significantly below its estimated fair value of US$261.83, suggesting it may be undervalued based on cash flows. Recent earnings showed a notable increase with net income rising to US$99 million from US$22 million year-over-year. However, despite high forecasted earnings growth of 20.1% annually and a strong return on equity projection, Clorox faces challenges with debt levels and revenue growth lagging the broader market expectations.
Overview: Onto Innovation Inc. designs, develops, manufactures, and supports process control tools for optical metrology, with a market cap of approximately $8.40 billion.
Operations: The company's revenue is primarily derived from its Semiconductor Equipment and Services segment, totaling $942.24 million.
Estimated Discount To Fair Value: 12.1%
Onto Innovation, priced at US$164.99, trades below its estimated fair value of US$187.63. Its recent earnings report highlights robust growth with quarterly sales rising to US$252.21 million from US$207.19 million year-over-year and net income increasing to US$53.05 million from US$35.89 million. Despite slower revenue growth compared to some benchmarks, its projected significant annual earnings growth of 30.2% positions it favorably against the broader U.S market expectations.
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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.
