As European markets experience a modest upswing, with the pan-European STOXX Europe 600 Index rising by 1.77% amid relief from the reopening of the U.S. federal government, investor sentiment remains cautious due to cooling enthusiasm around artificial intelligence investments. In this environment, identifying stocks that are trading below their intrinsic value can be a strategic move for investors seeking opportunities amidst fluctuating market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In Europe
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| STEICO (XTRA:ST5) | €20.40 | €40.20 | 49.3% |
| Spindox (BIT:SPN) | €12.90 | €25.38 | 49.2% |
| Roche Bobois (ENXTPA:RBO) | €35.00 | €69.88 | 49.9% |
| NOBA Bank Group (OM:NOBA) | SEK100.14 | SEK198.13 | 49.5% |
| NEUCA (WSE:NEU) | PLN778.00 | PLN1553.92 | 49.9% |
| GN Store Nord (CPSE:GN) | DKK93.34 | DKK186.26 | 49.9% |
| E-Globe (BIT:EGB) | €0.665 | €1.30 | 48.8% |
| Bonesupport Holding (OM:BONEX) | SEK199.10 | SEK395.70 | 49.7% |
| Allegro.eu (WSE:ALE) | PLN32.225 | PLN64.22 | 49.8% |
| Absolent Air Care Group (OM:ABSO) | SEK203.00 | SEK400.29 | 49.3% |
Here we highlight a subset of our preferred stocks from the screener.
Datalogic (BIT:DAL)
Overview: Datalogic S.p.A. is a company that produces and distributes automatic data capture and process automation products across various regions including Italy, the Americas, Asia Pacific, Europe, the Middle East, and Africa with a market cap of €229.88 million.
Operations: Revenue Segments (in millions of €): Datalogic's revenue is derived from its operations in Italy, the Americas, Asia Pacific, and the combined regions of Europe, the Middle East, and Africa.
Estimated Discount To Fair Value: 10.8%
Datalogic is trading at €4.29, below its estimated fair value of €4.8, indicating it may be undervalued based on cash flows. Despite a decline in net income to €1.18 million for the nine months ending September 2025, earnings are forecast to grow significantly at 68.09% annually over the next three years, outpacing the Italian market's growth rate. However, current profit margins have decreased and return on equity remains low at 4.7%.
- Our comprehensive growth report raises the possibility that Datalogic is poised for substantial financial growth.
- Dive into the specifics of Datalogic here with our thorough financial health report.
Línea Directa Aseguradora Compañía de Seguros y Reaseguros (BME:LDA)
Overview: Línea Directa Aseguradora, S.A., Compañía de Seguros y Reaseguros operates in the insurance and reinsurance sectors in Spain and Portugal, with a market cap of approximately €1.21 billion.
Operations: The company's revenue is primarily derived from its Motor segment at €879.56 million, followed by the Home segment at €166.52 million, and the Health segment contributing €36.96 million.
Estimated Discount To Fair Value: 30.1%
Línea Directa Aseguradora is trading at €1.11, significantly below its estimated fair value of €1.59, highlighting potential undervaluation based on cash flows. Recent earnings show a net income increase to €59.67 million for the nine months ending September 2025 from €40.75 million a year prior, reflecting robust growth. Although revenue growth is moderate at 6.5% annually, it surpasses the Spanish market average and supports an expected annual profit growth of 10.48%.
- Upon reviewing our latest growth report, Línea Directa Aseguradora Compañía de Seguros y Reaseguros' projected financial performance appears quite optimistic.
- Click here to discover the nuances of Línea Directa Aseguradora Compañía de Seguros y Reaseguros with our detailed financial health report.
Sword Group (ENXTPA:SWP)
Overview: Sword Group S.E. offers IT and software solutions, with a market capitalization of €328.32 million.
Operations: The company's revenue is derived from its services in Belux (€108.49 million), Switzerland (€124.26 million), and the United Kingdom (€109.19 million).
Estimated Discount To Fair Value: 37.5%
Sword Group is trading at €34.75, significantly below its estimated fair value of €55.56, suggesting undervaluation based on cash flows. Despite a modest increase in earnings to €8.83 million for the first half of 2025, revenue grew to €175.81 million from the previous year. The company is expanding its public sector collaborations in Switzerland and has recently acquired Full On Net, enhancing its strategic positioning in Europe amidst forecasted profit growth exceeding the French market average.
- Our expertly prepared growth report on Sword Group implies its future financial outlook may be stronger than recent results.
- Take a closer look at Sword Group's balance sheet health here in our report.
Where To Now?
- Investigate our full lineup of 195 Undervalued European Stocks Based On Cash Flows right here.
- Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
- Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.
Want To Explore Some Alternatives?
- 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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