3 Stocks That May Be Undervalued In July 2026

Over the last 7 days, the United States market has experienced a slight decline of 1.4%, yet it remains up by 17% over the past year, with earnings anticipated to grow by 18% annually. In this context, identifying stocks that may be undervalued involves looking for those with strong fundamentals and growth potential that are not fully reflected in their current prices.

Top 10 Undervalued Stocks Based On Cash Flows In The United States

Click here to see the full list of 151 stocks from our Undervalued US Stocks Based On Cash Flows screener.

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

AeroVironment (AVAV)

Overview: AeroVironment, Inc. is a defense technology company that specializes in designing, developing, producing, and supporting robotic systems and related services for government agencies and businesses globally, with a market cap of approximately $7.17 billion.

Operations: The company's revenue is primarily derived from its Autonomous Systems segment, which generated $1.36 billion, and its Space, Cyber and Directed Energy segment, which contributed $618.77 million.

Estimated Discount To Fair Value: 31.4%

AeroVironment is trading at US$142.6, significantly below its estimated future cash flow value of US$207.99, suggesting undervaluation based on discounted cash flows. Despite a volatile share price and low forecasted return on equity, AeroVironment's earnings are projected to grow substantially at 69.76% annually. Recent contracts with Italy and Germany highlight strong demand for its unmanned systems in Europe, potentially enhancing revenue growth above the U.S. market average of 12.6%.

• The growth report we've compiled suggests that AeroVironment's future prospects could be on the up.
• Click here to discover the nuances of AeroVironment with our detailed financial health report.

Nu Holdings (NU)

Overview: Nu Holdings Ltd. operates a digital banking platform across Brazil, Mexico, Colombia, the Cayman Islands, and the United States with a market capitalization of $66.07 billion.

Operations: The company's revenue is primarily derived from its banking segment, which generated $7.59 billion.

Estimated Discount To Fair Value: 14.2%

Nu Holdings is trading at $13.99, below its estimated future cash flow value of $16.31, indicating potential undervaluation based on cash flows. The company's earnings grew by 48% last year and are forecasted to grow 20% annually, outpacing the U.S. market average of 17.7%. However, it has a high level of non-performing loans at 7.9%. A recent $1 billion share repurchase program underscores strong cash flow management capabilities.

• Our expertly prepared growth report on Nu Holdings implies its future financial outlook may be stronger than recent results.
• Click to explore a detailed breakdown of our findings in Nu Holdings' balance sheet health report.

Victoria's Secret (VSXY)

Overview: Victoria's Secret & Co. is a global specialty retailer of women's intimate apparel, other clothing, and beauty products, with a market cap of approximately $6.47 billion.

Operations: The company's revenue primarily comes from its Retail - Specialty segment, generating $6.76 billion.

Estimated Discount To Fair Value: 42.7%

Victoria's Secret, priced at US$87.41, is significantly undervalued relative to its estimated future cash flow value of US$152.67. Despite high debt levels and recent volatility in share price, the company has strong earnings growth prospects with a forecasted annual increase of 39.6%, outpacing the broader U.S. market. Recent product launches and strategic initiatives under its Path to Potential strategy highlight operational momentum despite being dropped from several Russell indexes in June 2026.

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

Seize The Opportunity

• Delve into our full catalog of 151 Undervalued US Stocks Based On Cash Flows here.
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Ready To Venture Into Other Investment Styles?

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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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