Top German Exchange Stocks Estimated To Be Up To 38.4% Below Intrinsic Value

The German market has recently shown mixed performance, with the DAX gaining 1.35% amidst a generally cautious European economic outlook. As investors navigate these fluctuating conditions, identifying undervalued stocks becomes crucial for making informed investment decisions. In this context, finding stocks that are estimated to be significantly below their intrinsic value can offer potential opportunities for growth and stability in an unpredictable market environment.

Top 10 Undervalued Stocks Based On Cash Flows In Germany

Name	Current Price	Fair Value (Est)	Discount (Est)
Kontron (XTRA:SANT)	€19.38	€30.86	37.2%
Stabilus (XTRA:STM)	€45.05	€81.66	44.8%
technotrans (XTRA:TTR1)	€16.80	€29.16	42.4%
ecotel communication ag (XTRA:E4C)	€12.85	€19.93	35.5%
CHAPTERS Group (XTRA:CHG)	€24.40	€43.32	43.7%
MTU Aero Engines (XTRA:MTX)	€259.70	€421.86	38.4%
R. STAHL (XTRA:RSL2)	€18.60	€29.19	36.3%
Vitesco Technologies Group (XTRA:VTSC)	€56.75	€111.66	49.2%
Your Family Entertainment (DB:RTV)	€2.48	€4.55	45.5%
INTERSHOP Communications (XTRA:ISHA)	€2.02	€3.57	43.4%

Click here to see the full list of 25 stocks from our Undervalued German Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

adesso (XTRA:ADN1)

Overview: adesso SE, along with its subsidiaries, offers IT services in Germany, Austria, Switzerland, and internationally with a market cap of €603.78 million.

Operations: The company generates revenue primarily from IT services (€1.31 billion) and IT solutions (€119.88 million).

Estimated Discount To Fair Value: 11.9%

adesso SE is trading at €92.6, below its estimated fair value of €105.14, indicating it may be undervalued based on cash flows. Despite interest payments not being well covered by earnings, the company's revenue is forecast to grow 11.8% per year, faster than the German market average of 5.2%. Earnings are expected to grow at a robust 38.08% annually and adesso SE is projected to become profitable within three years, reflecting strong future potential amidst current undervaluation.

• Our growth report here indicates adesso may be poised for an improving outlook.
• Navigate through the intricacies of adesso with our comprehensive financial health report here.

adidas (XTRA:ADS)

Overview: Adidas AG, with a market cap of €42.24 billion, designs, develops, produces, and markets athletic and sports lifestyle products across Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific region, and Latin America.

Operations: Adidas generates revenue from various regions, including €3.20 billion in Greater China, €2.31 billion in Latin America, and €5.16 billion in North America.

Estimated Discount To Fair Value: 32.7%

adidas AG (€236.6) is trading at 32.7% below its estimated fair value of €351.53, highlighting significant undervaluation based on cash flows. The company has recently revised its earnings guidance upward for 2024, expecting operating profit to reach around €1 billion due to better-than-expected performance. Earnings are forecast to grow significantly at 40.95% per year, outpacing the German market's growth rate of 19.6%, despite unfavorable currency effects impacting profitability this year.

• The analysis detailed in our adidas growth report hints at robust future financial performance.
• Take a closer look at adidas' balance sheet health here in our report.

MTU Aero Engines (XTRA:MTX)

Overview: MTU Aero Engines AG, with a market cap of €13.98 billion, develops, manufactures, markets, and maintains commercial and military aircraft engines as well as aero-derivative industrial gas turbines globally.

Operations: MTU Aero Engines generates revenue primarily from its Commercial Maintenance Business (MRO) at €4.35 billion and its Commercial and Military Engine Business (OEM) at €1.27 billion.

Estimated Discount To Fair Value: 38.4%

MTU Aero Engines (€259.7) is trading at 38.4% below its estimated fair value of €421.86, indicating significant undervaluation based on cash flows. The company is expected to become profitable within the next three years, with earnings forecasted to grow at 34.95% per year, which is above average market growth. Additionally, MTU's revenue growth (12.1% per year) outpaces the German market's rate of 5.2%, making it an attractive investment despite slower overall revenue growth projections compared to some peers.

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

Taking Advantage

• Gain an insight into the universe of 25 Undervalued German Stocks Based On Cash Flows by clicking here.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

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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.

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