3 Stocks Estimated To Be Undervalued By Up To 42.2%

As the U.S. stock market continues to rally with major indices hitting record highs, investors are keenly watching for potential interest rate cuts amid looming inflation data. In this environment, identifying undervalued stocks becomes crucial as they offer opportunities for growth even when the broader market is performing strongly.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Phibro Animal Health (PAHC)	$39.43	$77.67	49.2%
Peapack-Gladstone Financial (PGC)	$29.05	$56.54	48.6%
Northwest Bancshares (NWBI)	$12.74	$24.41	47.8%
Niagen Bioscience (NAGE)	$9.45	$18.63	49.3%
McGraw Hill (MH)	$15.04	$28.87	47.9%
Investar Holding (ISTR)	$22.98	$45.29	49.3%
Horizon Bancorp (HBNC)	$16.63	$31.86	47.8%
Exact Sciences (EXAS)	$53.89	$103.12	47.7%
AGNC Investment (AGNC)	$10.34	$20.38	49.3%
Advanced Flower Capital (AFCG)	$4.55	$8.76	48.1%

Click here to see the full list of 189 stocks from our Undervalued US Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Royal Gold (RGLD)

Overview: Royal Gold, Inc. is a company that acquires and manages precious metal streams, royalties, and related interests with a market cap of approximately $12.17 billion.

Operations: The company's revenue is derived from two main segments: Stream Interests, which generated $513.49 million, and Royalty Interests, contributing $278.44 million.

Estimated Discount To Fair Value: 42.2%

Royal Gold's stock is trading at US$186.43, significantly below its estimated fair value of US$322.48, indicating potential undervaluation based on cash flows. Recent earnings reports show robust growth with net income rising from US$81.21 million to US$132.35 million year-over-year for Q2 2025, and revenue forecasts suggest a healthy annual growth rate of 18.2%. The company's strategic acquisition discussions and credit facility expansion further strengthen its financial position amid positive market conditions.

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

Warner Music Group (WMG)

Overview: Warner Music Group Corp. is a music entertainment company operating in the United States, the United Kingdom, Germany, and internationally, with a market cap of approximately $17.57 billion.

Operations: The company's revenue is primarily derived from its Recorded Music segment, which generated $5.21 billion, and its Music Publishing segment, which contributed $1.26 billion.

Estimated Discount To Fair Value: 15.7%

Warner Music Group is trading at US$33.71, below its estimated fair value of US$40, suggesting undervaluation based on cash flows. However, the dividend yield of 2.25% isn't well-supported by earnings or free cash flow. Recent earnings reveal a net loss despite increased sales, and profit margins have declined year-over-year. While revenue growth is slower than the market average, projected annual earnings growth of 41.65% outpaces the broader U.S. market's expectations.

• Our comprehensive growth report raises the possibility that Warner Music Group is poised for substantial financial growth.
• Click to explore a detailed breakdown of our findings in Warner Music Group's balance sheet health report.

Pure Storage (PSTG)

Overview: Pure Storage, Inc. provides data storage and management technologies, products, and services globally with a market cap of $25.89 billion.

Operations: The company generates revenue primarily from its computer storage devices segment, which accounts for $3.35 billion.

Estimated Discount To Fair Value: 20.8%

Pure Storage is trading at US$79.5, under its fair value estimate of US$100.32, indicating potential undervaluation based on cash flows. Recent earnings show improved revenue and net income growth year-over-year, with a strong forecast for annual earnings growth of 33.7%, surpassing the U.S. market average. Despite high share price volatility and insider selling, the company's raised revenue guidance and strategic buybacks enhance its investment appeal amidst robust financial performance expectations.

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

Summing It All Up

• Click this link to deep-dive into the 189 companies within our Undervalued US Stocks Based On Cash Flows screener.
• Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
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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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