3 European Stocks Estimated To Be Up To 44.6% Below Intrinsic Value

Amid ongoing concerns about U.S. trade tariffs and monetary policy uncertainties, European markets have experienced a mixed performance, with the STOXX Europe 600 Index ending slightly lower and major indexes either down or flat. In this environment of fluctuating economic signals, identifying stocks that are trading below their intrinsic value can present opportunities for investors seeking potential long-term gains.

Top 10 Undervalued Stocks Based On Cash Flows In Europe

Name	Current Price	Fair Value (Est)	Discount (Est)
Sword Group (ENXTPA:SWP)	€32.15	€64.13	49.9%
Telefonaktiebolaget LM Ericsson (OM:ERIC B)	SEK83.22	SEK164.64	49.5%
Net Insight (OM:NETI B)	SEK4.83	SEK9.58	49.6%
JOST Werke (XTRA:JST)	€50.30	€98.61	49%
Storytel (OM:STORY B)	SEK92.25	SEK180.58	48.9%
Star7 (BIT:STAR7)	€6.20	€12.36	49.8%
dormakaba Holding (SWX:DOKA)	CHF686.00	CHF1359.67	49.5%
Neosperience (BIT:NSP)	€0.538	€1.06	49.2%
Groupe Airwell Société anonyme (ENXTPA:ALAIR)	€1.13	€2.25	49.8%
Cavotec (OM:CCC)	SEK17.35	SEK34.06	49.1%

Click here to see the full list of 201 stocks from our Undervalued European Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

HMS Networks (OM:HMS)

Overview: HMS Networks AB (publ) provides products that facilitate communication and information sharing for industrial equipment globally, with a market cap of SEK23.68 billion.

Operations: The company generates revenue from its Wireless Communications Equipment segment, which amounts to SEK3.06 billion.

Estimated Discount To Fair Value: 25.2%

HMS Networks is trading at SEK472, significantly below its estimated fair value of SEK630.67, indicating undervaluation based on discounted cash flows. Despite a forecasted low return on equity and declining profit margins from 18.9% to 10.1%, the company anticipates strong earnings growth of 32.7% annually, outpacing the Swedish market's average growth rate. Recent acquisitions have led to a dividend suspension, while revenue and earnings are expected to improve in the latter half of 2025.

• Our earnings growth report unveils the potential for significant increases in HMS Networks' future results.
• Navigate through the intricacies of HMS Networks with our comprehensive financial health report here.

Kontron (XTRA:SANT)

Overview: Kontron AG provides internet of things (IoT) solutions in Austria and internationally, with a market cap of €1.53 billion.

Operations: The company's revenue segments include €1.16 billion from Europe, €294.77 million from Global operations, and €429.91 million from Software + Solutions.

Estimated Discount To Fair Value: 10.8%

Kontron is trading at €24.9, below its estimated fair value of €27.91, showing potential undervaluation based on cash flows. The company forecasts robust earnings growth of 20.1% annually, surpassing the German market average, though revenue growth is slower at 7.2%. Recent contracts in 5G automotive IoT and defense sectors bolster its position and future revenues. However, a dividend yield of 2.01% isn't well-supported by free cash flows, indicating potential sustainability concerns.

• In light of our recent growth report, it seems possible that Kontron's financial performance will exceed current levels.
• Click to explore a detailed breakdown of our findings in Kontron's balance sheet health report.

Ströer SE KGaA (XTRA:SAX)

Overview: Ströer SE & Co. KGaA operates in the out-of-home media and online advertising sectors both in Germany and internationally, with a market cap of €3.24 billion.

Operations: The company's revenue segments include Daas & E-Commerce (€357.80 million), Out-Of-Home Media (€953.20 million), and Digital & Dialog Media (€878.30 million).

Estimated Discount To Fair Value: 44.6%

Ströer SE KGaA is trading at €56.15, significantly below its estimated fair value of €104.77, highlighting undervaluation based on cash flows. The company's earnings grew by 58.9% last year and are projected to grow annually by 19.3%, outpacing the German market average. However, revenue growth is slower at 6.4%. Recent discussions about divesting its advertising business could impact future valuations and require shareholder approval if a deal proceeds.

• Insights from our recent growth report point to a promising forecast for Ströer SE KGaA's business outlook.
• Unlock comprehensive insights into our analysis of Ströer SE KGaA stock in this financial health report.

Make It Happen

• Gain an insight into the universe of 201 Undervalued European Stocks Based On Cash Flows by clicking here.
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Seeking Other Investments?

• 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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