3 Undervalued US Stocks With Estimated Discounts Ranging From 25.2% To 46.1%

As the U.S. stock market experiences robust growth, with significant contributions from big tech sectors pushing indices like Nasdaq and S&P 500 to record highs, investors are keenly observing market dynamics for potential opportunities. In this environment, identifying undervalued stocks becomes crucial as they may offer substantial value amidst prevailing market conditions characterized by high valuations in many sectors.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Hanover Bancorp (NasdaqGS:HNVR)	$16.06	$31.85	49.6%
Selective Insurance Group (NasdaqGS:SIGI)	$91.58	$180.07	49.1%
Victory Capital Holdings (NasdaqGS:VCTR)	$47.53	$92.65	48.7%
Daqo New Energy (NYSE:DQ)	$15.64	$30.44	48.6%
Array Technologies (NasdaqGM:ARRY)	$9.62	$18.57	48.2%
HeartCore Enterprises (NasdaqCM:HTCR)	$0.71	$1.39	49.1%
USCB Financial Holdings (NasdaqGM:USCB)	$11.99	$23.52	49%
Vasta Platform (NasdaqGS:VSTA)	$3.15	$6.10	48.4%
APi Group (NYSE:APG)	$36.89	$71.53	48.4%
Alnylam Pharmaceuticals (NasdaqGS:ALNY)	$251.03	$490.05	48.8%

Click here to see the full list of 182 stocks from our Undervalued US Stocks Based On Cash Flows screener.

Let's review some notable picks from our screened stocks

Amazon.com (NasdaqGS:AMZN)

Overview: Amazon.com, Inc. operates as a global online retailer and offers consumer products, advertising services, and subscriptions through both digital and physical store formats, with a market capitalization of approximately $2.08 trillion.

Operations: The company generates revenue through its international operations ($134.01 billion), North American sales ($362.29 billion), and Amazon Web Services (AWS) which contributes $94.44 billion.

Estimated Discount To Fair Value: 39.3%

Amazon.com is currently perceived as undervalued based on its cash flow analysis, trading below the estimated fair value by over 20%. Despite a significant earnings growth of 777.6% over the past year, Amazon's forecasted revenue growth rate stands at 9.8% annually, which is slightly above the US market average but below high-growth benchmarks. The projected return on equity in three years is modest at 18.1%. Looking ahead, earnings are expected to increase substantially by approximately 21.37% per year over the next three years, outpacing broader market expectations.

• The analysis detailed in our Amazon.com growth report hints at robust future financial performance.
• Click here to discover the nuances of Amazon.com with our detailed financial health report.

Atlassian (NasdaqGS:TEAM)

Overview: Atlassian Corporation operates globally, designing, developing, licensing, and maintaining a range of software products with a market capitalization of approximately $48.76 billion.

Operations: The company generates its revenue primarily from software and programming, amounting to approximately $4.17 billion.

Estimated Discount To Fair Value: 25.2%

Atlassian's recent financial maneuvers, including a substantial fixed-income offering totaling nearly US$1 billion, underscore its strategic approach to capital management amidst its operational growth. While the company has successfully turned a net profit this quarter with revenues surging to US$1.19 billion from US$915.45 million year-over-year, it remains undervalued based on cash flow analyses with its stock trading 25.2% below our fair value estimate. Despite these gains and an optimistic revenue growth forecast of 16.8% annually, Atlassian's debt issuance could reflect a cautious stance towards future liquidity needs or expansion plans.

• Our growth report here indicates Atlassian may be poised for an improving outlook.
• Dive into the specifics of Atlassian here with our thorough financial health report.

Sea (NYSE:SE)

Overview: Sea Limited operates in digital entertainment, e-commerce, and digital financial services across Southeast Asia, Latin America, and other regions, with a market capitalization of approximately $41.28 billion.

Operations: The company's revenue streams include e-commerce at $9.68 billion, digital entertainment at $2.09 billion, and digital financial services at $1.85 billion.

Estimated Discount To Fair Value: 46.1%

Sea Limited's recent financials reveal a shift from profit to a net loss of US$23.66 million in Q1 2024, contrasting sharply with the previous year's net income. Despite this setback, the company remains substantially undervalued based on discounted cash flow analysis, trading 46.1% below our estimated fair value. With earnings expected to grow by 41.8% annually over the next three years and revenue projected to outpace the US market growth rate, Sea’s financial trajectory suggests potential under current valuations despite recent earnings volatility influenced by significant one-off items.

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

Make It Happen

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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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