As European markets face renewed concerns over inflated AI stock valuations and receding expectations for a U.S. interest rate cut, the STOXX Europe 600 Index ended 2.21% lower, reflecting broader economic uncertainties. In such an environment, identifying potentially undervalued stocks can be crucial for investors seeking opportunities amidst fluctuating market sentiments and economic indicators.
Top 10 Undervalued Stocks Based On Cash Flows In Europe
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| YIT Oyj (HLSE:YIT) | €3.046 | €5.95 | 48.8% |
| Mangata Holding (WSE:MGT) | PLN63.00 | PLN123.43 | 49% |
| KB Components (OM:KBC) | SEK42.75 | SEK83.52 | 48.8% |
| HMS Bergbau (XTRA:HMU) | €52.00 | €103.59 | 49.8% |
| Exel Composites Oyj (HLSE:EXL1V) | €0.402 | €0.78 | 48.5% |
| Esautomotion (BIT:ESAU) | €3.12 | €6.13 | 49.1% |
| EcoUp Oyj (HLSE:ECOUP) | €1.34 | €2.64 | 49.3% |
| cyan (XTRA:CYR) | €2.32 | €4.55 | 49.1% |
| B&S Group (ENXTAM:BSGR) | €5.95 | €11.85 | 49.8% |
| Allcore (BIT:CORE) | €1.325 | €2.65 | 49.9% |
We're going to check out a few of the best picks from our screener tool.
CD Projekt (WSE:CDR)
Overview: CD Projekt S.A., along with its subsidiaries, focuses on developing, publishing, and digitally distributing video games for PCs and consoles in Poland, with a market cap of PLN24.28 billion.
Operations: The company's revenue segments consist of PLN205.97 million from GOG.Com and PLN812.26 million from CD PROJEKT RED.
Estimated Discount To Fair Value: 37%
CD Projekt is trading significantly below its estimated fair value, with a current price of PLN243 compared to a fair value estimate of PLN385.47. Recent earnings show strong growth, with Q3 2025 revenue rising to PLN349.07 million from PLN227.45 million the previous year and net income increasing to PLN193.49 million from PLN78.11 million. The company's earnings are forecasted to grow at an impressive rate of 50.7% annually, outpacing both revenue growth and market averages in Poland.
- Our earnings growth report unveils the potential for significant increases in CD Projekt's future results.
- Get an in-depth perspective on CD Projekt's balance sheet by reading our health report here.
adidas (XTRA:ADS)
Overview: adidas AG, along with its subsidiaries, is engaged in the design, development, production, and marketing of athletic and sports lifestyle products globally with a market cap of €28.36 billion.
Operations: adidas generates its revenue through the design, development, production, and marketing of athletic and sports lifestyle products across Europe, Greater China, Japan, South Korea, Latin America, North America, and other international markets.
Estimated Discount To Fair Value: 37.7%
adidas AG is trading at €158.85, significantly below its estimated fair value of €255.14, suggesting potential undervaluation based on cash flows. The company's earnings grew by a substantial 217.8% over the past year and are forecast to grow at 21.8% annually, surpassing market averages in Germany. Recent Q3 results showed sales of €6.63 billion and net income of €461 million, reflecting steady financial performance amidst strategic expansions and partnerships in various product lines.
- The analysis detailed in our adidas growth report hints at robust future financial performance.
- Click here and access our complete balance sheet health report to understand the dynamics of adidas.
Grenke (XTRA:GLJ)
Overview: Grenke AG, with a market cap of €0.65 billion, offers financial services to small and medium-sized enterprises in Germany, France, Italy, and internationally through its subsidiaries.
Operations: The company's revenue is derived from several regions, including Western Europe (excluding Dach) at €183.83 million, Southern Europe at €154.01 million, Northern/Eastern Europe at €120.80 million, the Dach region at €108.31 million, and Other Regions contributing €56.45 million.
Estimated Discount To Fair Value: 28.5%
Grenke AG is trading at €14.68, below its estimated fair value of €20.53, indicating undervaluation based on cash flows. Despite a decline in profit margins from 12.8% to 8%, the company reported Q3 net income of €21.24 million, up from €13.47 million last year. Earnings are expected to grow significantly at 26% annually over the next three years, outpacing the German market's average growth rate of 16.6%.
- According our earnings growth report, there's an indication that Grenke might be ready to expand.
- Navigate through the intricacies of Grenke with our comprehensive financial health report here.
Summing It All Up
- Navigate through the entire inventory of 200 Undervalued European Stocks Based On Cash Flows here.
- Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
- Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.
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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