Yahoo Finance 3 US Stocks That May Be Trading Below Their Estimated Value In September 2024
As the U.S. stock market reacts to the Federal Reserve's recent rate cut decision, major indices have experienced fluctuations, reflecting investor uncertainty. This environment can create opportunities for discerning investors to identify stocks that may be trading below their estimated value. In such a volatile market, a good stock is often characterized by strong fundamentals, resilient earnings potential, and favorable industry positioning. Here are three U.S. stocks that may be trading below their estimated value in September 2024.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
Name | Current Price | Fair Value (Est) | Discount (Est) |
Western Alliance Bancorporation (NYSE:WAL) | $84.85 | $168.28 | 49.6% |
Heartland Financial USA (NasdaqGS:HTLF) | $56.94 | $112.77 | 49.5% |
EQT (NYSE:EQT) | $33.53 | $65.86 | 49.1% |
California Resources (NYSE:CRC) | $52.31 | $104.32 | 49.9% |
Trustmark (NasdaqGS:TRMK) | $32.75 | $64.82 | 49.5% |
Progress Software (NasdaqGS:PRGS) | $57.52 | $114.90 | 49.9% |
ChromaDex (NasdaqCM:CDXC) | $3.55 | $7.10 | 50% |
American Superconductor (NasdaqGS:AMSC) | $20.725 | $40.71 | 49.1% |
TransMedics Group (NasdaqGM:TMDX) | $155.96 | $305.23 | 48.9% |
Carter Bankshares (NasdaqGS:CARE) | $17.75 | $35.20 | 49.6% |
Below we spotlight a couple of our favorites from our exclusive screener.
Duolingo
Overview: Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally with a market cap of $10.56 billion (NasdaqGS:DUOL).
Operations: The company's revenue from educational software is $634.49 million.
Estimated Discount To Fair Value: 46.5%
Duolingo's recent earnings report shows strong financial performance with Q2 sales of US$178.33 million and net income of US$24.35 million, reflecting significant year-over-year growth. The company is trading at 46.5% below its estimated fair value and is highly undervalued based on discounted cash flow analysis (DCF). With expected annual revenue growth of 24.4% and earnings forecasted to grow significantly over the next three years, Duolingo presents a compelling case for being undervalued based on cash flows.
Estée Lauder Companies
Overview: The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide with a market cap of approximately $31.60 billion.
Operations: The company's revenue segments include skin care ($7.91 billion), makeup ($4.47 billion), fragrance ($2.49 billion), and hair care ($629 million).
Estimated Discount To Fair Value: 25%
Estée Lauder Companies, trading at US$88, is 25% below its estimated fair value of US$117.37 based on discounted cash flow analysis. Despite high debt levels and a dividend not well covered by earnings, the company's forecasted annual profit growth of 27.75% outpaces the US market average. Recent financials show decreased net income due to significant impairments, but future earnings are expected to grow significantly over the next three years.
Flutter Entertainment
Overview: Flutter Entertainment plc is a global sports betting and gaming company with operations in the United Kingdom, Ireland, Australia, the United States, Italy, and other international markets, boasting a market cap of $40.98 billion.
Operations: The company's revenue segments include $5.25 billion from the US, $3.31 billion from the UK and Ireland, $1.39 billion from Australia, and $2.93 billion from international markets.
Estimated Discount To Fair Value: 21.1%
Flutter Entertainment, trading at US$229.05, is 21.1% below its estimated fair value of US$290.36 based on discounted cash flow analysis. The company is forecast to become profitable within three years and expects annual revenue growth of 11.2%, outpacing the US market average of 8.7%. Recent discussions about acquiring Snaitech S.p.A., alongside a strong Q2 performance with net income rising to $297 million, underscore its potential for sustained growth driven by the US market's success with FanDuel.
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.
Companies discussed in this article include NasdaqGS:DUOL NYSE:EL and NYSE:FLUT.
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