As the global markets face renewed fears about economic growth, with significant declines in major indices such as Germany’s DAX, investors are increasingly on the lookout for opportunities that may be undervalued. In this environment, identifying stocks that are trading below their intrinsic value can provide a strategic advantage. A good stock in these conditions often exhibits strong fundamentals, resilience to economic downturns, and potential for long-term growth despite current market volatility.
Top 10 Undervalued Stocks Based On Cash Flows In Germany
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| technotrans (XTRA:TTR1) | €16.15 | €31.17 | 48.2% |
| init innovation in traffic systems (XTRA:IXX) | €35.00 | €52.66 | 33.5% |
| Gerresheimer (XTRA:GXI) | €103.00 | €197.14 | 47.8% |
| Formycon (XTRA:FYB) | €49.80 | €71.99 | 30.8% |
| SAP (XTRA:SAP) | €199.18 | €287.11 | 30.6% |
| Verbio (XTRA:VBK) | €15.62 | €30.26 | 48.4% |
| Schweizer Electronic (XTRA:SCE) | €3.88 | €7.19 | 46.1% |
| MTU Aero Engines (XTRA:MTX) | €275.40 | €496.19 | 44.5% |
| elumeo (XTRA:ELB) | €2.20 | €3.91 | 43.8% |
| Basler (XTRA:BSL) | €9.03 | €14.05 | 35.7% |
Let's uncover some gems from our specialized screener.
Gerresheimer (XTRA:GXI)
Overview: Gerresheimer AG, with a market cap of €3.55 billion, manufactures and sells medicine packaging, drug delivery devices, and solutions in Germany and internationally through its subsidiaries.
Operations: Gerresheimer's revenue segments include Plastics & Devices (€1.11 billion), Advanced Technologies (€6.21 million), and Primary Packaging Glass (€892.01 million).
Estimated Discount To Fair Value: 47.8%
Gerresheimer AG, trading at €103, is significantly undervalued with an estimated fair value of €197.14. Despite a modest revenue growth forecast of 11% annually, which is higher than the German market average of 5.4%, its earnings are expected to grow substantially at 22.2% per year over the next three years. However, recent earnings reports show slight declines in net income and basic EPS compared to last year, indicating some financial challenges despite strong future growth projections.
- Our growth report here indicates Gerresheimer may be poised for an improving outlook.
- Take a closer look at Gerresheimer's balance sheet health here in our report.
MTU Aero Engines (XTRA:MTX)
Overview: MTU Aero Engines AG, with a market cap of €14.82 billion, develops, manufactures, markets, and maintains commercial and military aircraft engines as well as aero-derivative industrial gas turbines globally.
Operations: MTU Aero Engines AG generates revenue through its Commercial Maintenance Business (MRO) segment, which contributed €4.45 billion, and its Commercial and Military Engine Business (OEM) segment, which added €1.32 billion.
Estimated Discount To Fair Value: 44.5%
MTU Aero Engines, trading at €275.4, is significantly undervalued with an estimated fair value of €496.19. The company reported half-year sales of €3.39 billion and net income of €285 million, showing growth from the previous year’s figures. Revenue is projected to grow 12.1% annually, outpacing the German market average of 5.4%. Earnings are forecast to increase by 35.06% per year and MTU is expected to become profitable within three years, highlighting strong future prospects despite current undervaluation based on cash flows.
- Insights from our recent growth report point to a promising forecast for MTU Aero Engines' business outlook.
- Click here and access our complete balance sheet health report to understand the dynamics of MTU Aero Engines.
SAP (XTRA:SAP)
Overview: SAP SE, along with its subsidiaries, offers applications, technology, and services globally and has a market cap of approximately €232.08 billion.
Operations: SAP SE's revenue from its Applications, Technology & Services segment is €32.54 billion.
Estimated Discount To Fair Value: 30.6%
SAP SE, trading at €199.18, is significantly undervalued with an estimated fair value of €287.11. Despite recent executive changes and a shelf registration filing for $60.93 million, SAP's earnings are forecast to grow 37.88% annually over the next three years, outpacing the German market average of 19.8%. Revenue growth is projected at 10% per year, faster than the German market's 5.4%. SAP's strategic moves in cloud ERP and AI integration further bolster its potential for robust cash flows and operational efficiency enhancements.
- According our earnings growth report, there's an indication that SAP might be ready to expand.
- Get an in-depth perspective on SAP's balance sheet by reading our health report here.
Where To Now?
- Embark on your investment journey to our 19 Undervalued German Stocks Based On Cash Flows selection here.
- Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
- Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.
Contemplating Other Strategies?
- 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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