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In the wake of recent market volatility driven by global tariff tensions, Australian shares are poised for a significant downturn, with ASX 200 futures indicating a sharp decline. Amidst this challenging environment, identifying undervalued stocks requires careful analysis of fundamentals and resilience to external economic pressures.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Acrow (ASX:ACF) | A$1.035 | A$2.04 | 49.3% |
| Nick Scali (ASX:NCK) | A$15.01 | A$28.70 | 47.7% |
| GenusPlus Group (ASX:GNP) | A$2.65 | A$5.20 | 49% |
| Environmental Group (ASX:EGL) | A$0.24 | A$0.47 | 49.4% |
| PolyNovo (ASX:PNV) | A$1.05 | A$2.06 | 49.1% |
| Amaero International (ASX:3DA) | A$0.26 | A$0.46 | 43.6% |
| James Hardie Industries (ASX:JHX) | A$34.84 | A$60.84 | 42.7% |
| SciDev (ASX:SDV) | A$0.43 | A$0.84 | 48.5% |
| Integral Diagnostics (ASX:IDX) | A$2.28 | A$4.07 | 44% |
| Pantoro (ASX:PNR) | A$2.55 | A$4.92 | 48.2% |
Here's a peek at a few of the choices from the screener.
Capricorn Metals
Overview: Capricorn Metals Ltd is involved in the evaluation, exploration, development, and production of gold properties in Australia with a market cap of A$3.50 billion.
Operations: The company's revenue primarily comes from its Karlawinda gold operations, generating A$379.47 million.
Estimated Discount To Fair Value: 26.6%
Capricorn Metals is trading at A$8.47, below its estimated fair value of A$11.54, suggesting it may be undervalued based on cash flows. Recent earnings results show sales increased to A$201.37 million for the half year ending December 2024, although net income decreased to A$43.11 million compared to the previous year. Despite this, revenue and earnings are forecasted to grow significantly faster than the market, with a high return on equity expected in three years.
Nanosonics
Overview: Nanosonics Limited is a global infection prevention company with a market capitalization of A$1.42 billion.
Operations: The company generates revenue primarily from its Healthcare Equipment segment, which accounts for A$183.97 million.
Estimated Discount To Fair Value: 34.3%
Nanosonics is trading at A$4.64, below its estimated fair value of A$7.06, indicating potential undervaluation based on cash flows. Recent earnings show sales increased to A$93.6 million for H1 2025, with net income rising to A$9.76 million year-over-year. Revenue and earnings are forecasted to grow significantly faster than the market, though return on equity remains low in future projections. The company has also revised its revenue growth guidance upwards for early 2025.
