3 German Stocks That Could Be Trading Below Their Estimated Value

As global markets react to a mix of economic data and investor sentiment, the German DAX has seen notable declines, reflecting broader concerns about growth. Despite this downturn, opportunities may exist for discerning investors seeking undervalued stocks in Germany. Identifying undervalued stocks often involves looking at companies with strong fundamentals that are temporarily out of favor or mispriced by the market. In the current environment, where volatility is high and economic indicators are mixed, such stocks could offer potential value for those willing to look beyond short-term fluctuations.

Top 10 Undervalued Stocks Based On Cash Flows In Germany

Name	Current Price	Fair Value (Est)	Discount (Est)
Kontron (XTRA:SANT)	€18.25	€34.27	46.7%
Allgeier (XTRA:AEIN)	€16.85	€29.41	42.7%
M1 Kliniken (XTRA:M12)	€13.35	€23.69	43.7%
ecotel communication ag (XTRA:E4C)	€13.45	€22.25	39.5%
Verbio (XTRA:VBK)	€15.27	€29.23	47.8%
RENK Group (DB:R3NK)	€24.875	€40.40	38.4%
R. STAHL (XTRA:RSL2)	€17.70	€32.96	46.3%
MTU Aero Engines (XTRA:MTX)	€256.60	€474.16	45.9%
Vectron Systems (XTRA:V3S)	€10.80	€17.65	38.8%
Basler (XTRA:BSL)	€9.20	€16.33	43.7%

Click here to see the full list of 18 stocks from our Undervalued German Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

adesso (XTRA:ADN1)

Overview: adesso SE, with a market cap of €580.30 million, offers IT services through its subsidiaries in Germany, Austria, Switzerland, and internationally.

Operations: The company's revenue segments include IT-Services (€1.31 billion) and IT-Solutions (€119.88 million).

Estimated Discount To Fair Value: 23.6%

adesso is trading at €89, significantly below its estimated fair value of €116.47, indicating it may be undervalued based on cash flows. The stock trades at 23.6% below our fair value estimate and is expected to see revenue growth of 11.8% per year, outpacing the German market's 5.2%. Earnings are forecast to grow by 38.08% annually, with profitability anticipated within three years despite low return on equity projections (14.1%).

• The analysis detailed in our adesso growth report hints at robust future financial performance.
• Get an in-depth perspective on adesso's balance sheet by reading our health report here.

Basler (XTRA:BSL)

Overview: Basler Aktiengesellschaft develops, manufactures, and sells digital cameras for professional users in Germany and internationally, with a market cap of €282.78 million.

Operations: Basler generates revenue primarily from its camera segment, amounting to €190.30 million.

Estimated Discount To Fair Value: 43.7%

Basler is trading at €9.2, well below its estimated fair value of €16.33, indicating significant undervaluation based on cash flows. The company is expected to become profitable within three years and see earnings growth of 84.03% annually, outperforming the German market's average growth rate. Despite a recent net loss of €3.9 million in Q1 2024, Basler's revenue is forecast to grow at 13.2% per year, faster than the market average of 5.2%.

• Our comprehensive growth report raises the possibility that Basler is poised for substantial financial growth.
• Delve into the full analysis health report here for a deeper understanding of Basler.

MBB (XTRA:MBB)

Overview: MBB SE, with a market cap of €560.21 million, is involved in acquiring and managing medium-sized companies mainly in the technology and engineering sectors both in Germany and internationally.

Operations: The company's revenue segments consist of €94.23 million from Consumer Goods, €378.50 million from Technical Applications, and €487.10 million from Service & Infrastructure.

Estimated Discount To Fair Value: 27.2%

MBB SE, trading at €98, is significantly undervalued with a fair value estimate of €134.57. The company's earnings are forecast to grow 33.1% annually, outpacing the German market's 20.3%. Recent Q1 2024 results show a turnaround with net income of €5.77 million compared to a loss last year, and revenue growth to €215.19 million from €209.26 million. Analysts expect the stock price to rise by 25.5%.

• In light of our recent growth report, it seems possible that MBB's financial performance will exceed current levels.
• Click here and access our complete balance sheet health report to understand the dynamics of MBB.

Taking Advantage

• Explore the 18 names from our Undervalued German Stocks Based On Cash Flows screener 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.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

Interested In Other Possibilities?

• 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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