In This Article:
As the Australian market continues to show resilience, with the ASX200 closing up 0.36% at 7,997 points, investors are keenly observing sector performances that drive growth and stability. With sectors like Energy and IT leading gains, identifying stocks trading below their intrinsic value becomes crucial in capitalizing on potential opportunities amidst fluctuating market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| LaserBond (ASX:LBL) | A$0.375 | A$0.66 | 43.1% |
| Acrow (ASX:ACF) | A$1.075 | A$2.04 | 47.3% |
| Domino's Pizza Enterprises (ASX:DMP) | A$25.85 | A$51.48 | 49.8% |
| GenusPlus Group (ASX:GNP) | A$2.72 | A$5.12 | 46.9% |
| Medical Developments International (ASX:MVP) | A$0.465 | A$0.89 | 47.8% |
| PolyNovo (ASX:PNV) | A$1.155 | A$1.93 | 40.2% |
| Integral Diagnostics (ASX:IDX) | A$2.29 | A$4.08 | 43.9% |
| Nuix (ASX:NXL) | A$2.42 | A$4.23 | 42.8% |
| Electro Optic Systems Holdings (ASX:EOS) | A$1.25 | A$2.35 | 46.9% |
| Superloop (ASX:SLC) | A$2.39 | A$4.58 | 47.8% |
We'll examine a selection from our screener results.
Domino's Pizza Enterprises
Overview: Domino's Pizza Enterprises Limited operates retail food outlets and has a market cap of A$2.44 billion.
Operations: The company generates revenue primarily from its restaurants segment, which accounts for A$2.30 billion.
Estimated Discount To Fair Value: 49.8%
Domino's Pizza Enterprises is trading at A$25.85, significantly below its estimated fair value of A$51.48, indicating potential undervaluation based on cash flows. Despite a high debt level and recent net loss of A$22.17 million for H1 FY2025, earnings are forecast to grow 43.3% annually, outpacing the Australian market average growth rate. However, revenue growth projections lag behind the market average, and profit margins have declined from last year’s figures.
National Storage REIT
Overview: National Storage REIT is the largest self-storage provider in Australia and New Zealand, operating over 225 centers for more than 90,000 residential and commercial customers, with a market cap of A$3.12 billion.
Operations: The company's revenue segment is primarily derived from the operation and management of storage centers, generating A$369.99 million.
Estimated Discount To Fair Value: 35.4%
National Storage REIT, trading at A$2.24, is valued 35.4% below its estimated fair value of A$3.47, suggesting potential undervaluation based on cash flows. Earnings are projected to grow at 21.2% annually, surpassing the Australian market average growth rate; however, profit margins have decreased from last year’s figures and debt coverage by operating cash flow is weak. Recent earnings show increased revenue but a decline in net income compared to the previous year.