European Stocks That May Be Trading Below Their Estimated Value

As European markets navigate a complex landscape of interest rate policies and trade uncertainties, major indices like Germany's DAX and Italy's FTSE MIB have shown modest gains. In this environment, identifying stocks that may be trading below their estimated value can offer potential opportunities for investors looking to capitalize on market inefficiencies.

Top 10 Undervalued Stocks Based On Cash Flows In Europe

Click here to see the full list of 216 stocks from our Undervalued European Stocks Based On Cash Flows screener.

We'll examine a selection from our screener results.

Lime Technologies (OM:LIME)

Overview: Lime Technologies AB (publ) offers SaaS-based CRM solutions in the Nordic region and has a market cap of SEK4.25 billion.

Operations: The company's revenue primarily comes from selling and implementing CRM systems, amounting to SEK714.91 million.

Estimated Discount To Fair Value: 22%

Lime Technologies' stock is trading at SEK319, significantly below its estimated fair value of SEK408.91, suggesting it may be undervalued based on cash flows. The company reported robust earnings growth with net income rising to SEK26.16 million in Q2 2025 from SEK20.42 million a year ago. Earnings are projected to grow at 21.3% annually, outpacing the Swedish market's 16.4%, while revenue growth is also expected to surpass market averages at 11.5%.

• Upon reviewing our latest growth report, Lime Technologies' projected financial performance appears quite optimistic.
• Take a closer look at Lime Technologies' balance sheet health here in our report.

SGS (SWX:SGSN)

Overview: SGS SA offers inspection, testing, and certification services across Europe, Africa, the Middle East, Latin America, North America, and the Asia Pacific with a market cap of CHF15.68 billion.

Operations: The company's revenue is derived from several segments: Business Assurance (CHF775 million), Testing & Inspection - Natural Resources (CHF1.59 billion), Testing & Inspection - Health & Nutrition (CHF915 million), Testing & Inspection - Industries & Environment (CHF2.29 billion), and Testing & Inspection - Connectivity & Products (CHF1.31 billion).

Estimated Discount To Fair Value: 40.3%

SGS is trading at CHF81, well below its estimated fair value of CHF135.69, indicating potential undervaluation based on cash flows. Despite high debt levels, the company's earnings grew 14.6% last year and are forecast to grow 11.3% annually, outpacing the Swiss market's 11%. Recent strategic alliances with Diginex Limited aim to enhance ESG data assurance and sustainable finance solutions, potentially bolstering SGS's growth prospects in these areas amidst evolving regulatory landscapes.

• According our earnings growth report, there's an indication that SGS might be ready to expand.
• Unlock comprehensive insights into our analysis of SGS stock in this financial health report.

Atal (WSE:1AT)

Overview: Atal S.A. is involved in the development and sale of residential buildings in Poland, with a market capitalization of PLN2.51 billion.

Operations: The company generates revenue primarily from development activity, amounting to PLN1.16 billion, and rental services, contributing PLN11.03 million.

Estimated Discount To Fair Value: 25.9%

Atal S.A. is trading at PLN58, significantly below its estimated fair value of PLN78.32, highlighting potential undervaluation based on cash flows. Despite a drop in net income to PLN57.39 million for H1 2025, earnings are expected to grow 27.6% annually over the next three years, surpassing the Polish market's growth rate of 14.7%. However, Atal's dividend yield of 9.48% is not well covered by earnings or free cash flows, and debt coverage by operating cash flow remains insufficient.

• Our expertly prepared growth report on Atal implies its future financial outlook may be stronger than recent results.
• Click here and access our complete balance sheet health report to understand the dynamics of Atal.

Key Takeaways

• Dive into all 216 of the Undervalued European Stocks Based On Cash Flows we have identified here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
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Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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.

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