3 Stocks Estimated To Be Trading At Discounts Of Up To 23%

As the U.S. market continues to experience record highs, with indices like the S&P 500 and Nasdaq reaching unprecedented levels, investors are keenly observing economic indicators such as the Producer Price Index for signs of inflationary pressure. In this vibrant market landscape, identifying undervalued stocks can be a strategic move, especially when considering factors like lower-than-expected inflation data and potential interest rate adjustments that could influence future growth prospects.

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.

Let's dive into some prime choices out of the screener.

Penguin Solutions (PENG)

Overview: Penguin Solutions, Inc. designs and develops enterprise solutions globally, with a market cap of $1.28 billion.

Operations: The company generates revenue through three primary segments: Optimized LED ($254.66 million), Integrated Memory ($427.92 million), and Advanced Computing ($659.44 million).

Estimated Discount To Fair Value: 22.3%

Penguin Solutions is trading at US$24.45, below its estimated fair value of US$31.48, suggesting it may be undervalued based on cash flows. The company forecasts a substantial earnings growth of 176.9% annually and expects profitability within three years, outpacing market averages. Recent executive appointments aim to bolster growth strategies in advanced computing solutions, while a new revolving credit facility has reduced debt by US$200 million, enhancing financial stability and operational flexibility.

• According our earnings growth report, there's an indication that Penguin Solutions might be ready to expand.
• Click here and access our complete balance sheet health report to understand the dynamics of Penguin Solutions.

Granite Construction (GVA)

Overview: Granite Construction Incorporated is a U.S.-based infrastructure contractor with a market cap of approximately $4.70 billion.

Operations: The company's revenue segments include $868.44 million from Materials and $3.45 billion from Construction.

Estimated Discount To Fair Value: 23%

Granite Construction, trading at US$107.45, is undervalued with a fair value estimate of US$139.52 based on cash flow analysis. Earnings are projected to grow significantly at 42.5% annually, outpacing the market average of 15.2%. Recent strategic moves include appointing J. Timothy Romer to the board and pursuing M&A to enhance its materials business and geographic footprint, supporting robust cash generation despite insider selling in recent months.

• In light of our recent growth report, it seems possible that Granite Construction's financial performance will exceed current levels.
• Navigate through the intricacies of Granite Construction with our comprehensive financial health report here.

Zeta Global Holdings (ZETA)

Overview: Zeta Global Holdings Corp. operates an omnichannel data-driven cloud platform offering consumer intelligence and marketing automation software to enterprises globally, with a market cap of approximately $4.45 billion.

Operations: Zeta Global's revenue primarily comes from its Internet Software & Services segment, which generated $1.16 billion.

Estimated Discount To Fair Value: 16%

Zeta Global Holdings, trading at $18.70, is undervalued with a fair value estimate of $22.25 based on cash flow analysis. The company recently raised its revenue guidance for 2025, reflecting strong growth prospects despite historical volatility in share price. Strategic initiatives include a significant buyback program and the appointment of Nate Yohannes to lead AI innovation efforts, potentially enhancing future profitability as Zeta is expected to become profitable over the next three years.

• The analysis detailed in our Zeta Global Holdings growth report hints at robust future financial performance.
• Delve into the full analysis health report here for a deeper understanding of Zeta Global Holdings.

Next Steps

• Click here to access our complete index of 194 Undervalued US Stocks Based On Cash Flows.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all 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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