3 US Stocks That May Be Trading Below Fair Value Estimates

As U.S. stocks wrapped up a volatile August with gains across major indexes, investor sentiment has shifted positively amid easing inflationary pressures and anticipated interest rate cuts by the Federal Reserve. In this environment, identifying undervalued stocks can be particularly rewarding for investors looking to capitalize on market inefficiencies. A good stock in these conditions often exhibits strong fundamentals, resilient earnings potential, and a solid position within its industry—all while trading below fair value estimates.

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

Name	Current Price	Fair Value (Est)	Discount (Est)
Heartland Financial USA (NasdaqGS:HTLF)	$55.76	$109.12	48.9%
California Resources (NYSE:CRC)	$52.47	$103.98	49.5%
Tompkins Financial (NYSEAM:TMP)	$61.34	$121.86	49.7%
Progress Software (NasdaqGS:PRGS)	$58.15	$115.18	49.5%
Fluence Energy (NasdaqGS:FLNC)	$18.37	$35.72	48.6%
STAAR Surgical (NasdaqGM:STAA)	$33.09	$65.91	49.8%
EVERTEC (NYSE:EVTC)	$34.25	$66.69	48.6%
WEX (NYSE:WEX)	$191.02	$379.69	49.7%
Carter Bankshares (NasdaqGS:CARE)	$17.30	$34.56	49.9%
Alnylam Pharmaceuticals (NasdaqGS:ALNY)	$262.69	$515.00	49%

Click here to see the full list of 197 stocks from our Undervalued US Stocks Based On Cash Flows screener.

Let's explore several standout options from the results in the screener.

Adobe (NasdaqGS:ADBE)

Overview: Adobe Inc., with a market cap of $254.69 billion, operates as a diversified software company worldwide through its various subsidiaries.

Operations: Adobe Inc. generates revenue through three main segments: Digital Media ($15.03 billion), Digital Experience ($5.11 billion), and Publishing and Advertising ($284 million).

Estimated Discount To Fair Value: 22%

Adobe appears undervalued based on cash flows, trading at US$574.41, below its estimated fair value of US$736.53. Despite significant insider selling recently, Adobe's earnings have grown by 9.2% annually over the past five years and are forecast to grow 17.2% per year, outpacing the US market's expected growth rate of 15%. Recent product innovations in AI and marketing tools could further enhance profitability and operational efficiency.

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

Intuit (NasdaqGS:INTU)

Overview: Intuit Inc. offers financial management and compliance solutions for consumers, small businesses, self-employed individuals, and accounting professionals across the United States, Canada, and internationally with a market cap of approximately $176.19 billion.

Operations: Intuit's revenue segments include $4.40 billion from Consumer and $1.70 billion from Credit Karma.

Estimated Discount To Fair Value: 36.2%

Intuit, trading at US$630.26, is undervalued with a fair value estimate of US$987.88. Earnings are forecast to grow 16.5% annually, surpassing the US market's 15%. Recent financial results show revenue growth from US$14.37 billion to US$16.29 billion year-over-year and net income rising from US$2.38 billion to US$2.96 billion, despite a Q4 net loss of $20 million due to one-time charges. The company also announced a dividend increase and strong future earnings guidance.

• Our expertly prepared growth report on Intuit implies its future financial outlook may be stronger than recent results.
• Dive into the specifics of Intuit here with our thorough financial health report.

Oracle (NYSE:ORCL)

Overview: Oracle Corporation provides products and services for enterprise information technology environments globally, with a market cap of $389.38 billion.

Operations: Oracle's revenue segments include Hardware ($3.07 billion), Services ($5.43 billion), and Cloud and License ($44.46 billion).

Estimated Discount To Fair Value: 47.6%

Oracle, trading at US$141.29, is significantly undervalued with a fair value estimate of US$269.39. Its earnings are projected to grow 15.9% annually, outpacing the US market's 15%. Revenue growth is forecasted at 9.5% per year, slightly above the market average of 8.7%. Recent product launches like Oracle Communications Digital Business Experience aim to boost revenue and operational efficiency for clients, reinforcing Oracle's strong cash flow position despite its high debt levels and recent index drops.

• Our growth report here indicates Oracle may be poised for an improving outlook.
• Get an in-depth perspective on Oracle's balance sheet by reading our health report here.

Taking Advantage

• Unlock more gems! Our Undervalued US Stocks Based On Cash Flows screener has unearthed 194 more companies for you to explore.Click here to unveil our expertly curated list of 197 Undervalued US Stocks Based On Cash Flows.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Contemplating Other Strategies?

• 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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