GeneDx Holdings And Two Additional Stocks Estimated To Be Undervalued

As the U.S. stock market experiences a slight retreat from record highs, with tech stocks facing notable declines, investors are keenly observing opportunities within undervalued sectors. In this environment, identifying stocks that may be trading below their intrinsic value can offer potential for growth despite broader market fluctuations.

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

Click here to see the full list of 194 stocks from our Undervalued US Stocks Based On Cash Flows screener.

Below we spotlight a couple of our favorites from our exclusive screener.

GeneDx Holdings (WGS)

Overview: GeneDx Holdings Corp. is a genomics company that provides genetic testing services and has a market cap of approximately $3.72 billion.

Operations: The company generates revenue primarily from its Gene Dx segment, which accounts for $360.81 million.

Estimated Discount To Fair Value: 38.5%

GeneDx Holdings is trading significantly below its estimated fair value, with recent financials showing a shift to profitability. The company reported Q2 revenue of US$102.69 million, up from US$70.51 million last year, and net income of US$10.81 million compared to a loss previously. Despite being dropped from several indices and experiencing insider selling, GeneDx's earnings are forecasted to grow substantially above market rates, supported by revised revenue guidance and advancements in genomic testing technologies.

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

Zscaler (ZS)

Overview: Zscaler, Inc. is a global cloud security company with a market cap of approximately $43.14 billion.

Operations: The company's revenue primarily comes from sales of subscription services to its cloud platform and related support services, totaling $2.55 billion.

Estimated Discount To Fair Value: 22.5%

Zscaler is trading at US$277.05, below its estimated fair value of US$357.70, indicating potential undervaluation based on cash flows. The company recently launched Zscaler Cellular, enhancing its Zero Trust Exchange platform and addressing security challenges for IoT devices globally. Despite significant insider selling in the past quarter, Zscaler's earnings are forecasted to grow at 41.96% annually over the next few years, with profitability expected within three years and revenue growth outpacing the broader U.S. market.

• Insights from our recent growth report point to a promising forecast for Zscaler's business outlook.
• Click here to discover the nuances of Zscaler with our detailed financial health report.

Capital One Financial (COF)

Overview: Capital One Financial Corporation is a financial services holding company that offers a range of financial products and services in the United States, Canada, and the United Kingdom, with a market cap of approximately $145.31 billion.

Operations: Capital One's revenue is primarily derived from its Credit Card segment at $13.38 billion, followed by Consumer Banking at $7.80 billion, and Commercial Banking contributing $3.46 billion.

Estimated Discount To Fair Value: 18.5%

Capital One Financial is trading at US$227.22, undervalued relative to its fair value estimate of US$278.77, based on cash flows. Despite recent legal settlements and substantial insider selling, the company anticipates profitability within three years with revenue growth projected at 22.2% annually, outpacing the U.S. market average. However, shareholders have faced significant dilution over the past year and Capital One reported a net loss recently due to increased charge-offs and other financial challenges.

• Upon reviewing our latest growth report, Capital One Financial's projected financial performance appears quite optimistic.
• Delve into the full analysis health report here for a deeper understanding of Capital One Financial.

Summing It All Up

• Click here to access our complete index of 194 Undervalued US Stocks Based On Cash Flows.
• Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance.
• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Curious About Other Options?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com