Yahoo Finance 3 ASX Stocks That May Be Trading Below Their Estimated Value
Over the last 7 days, the Australian market has dropped 2.2%, but it has risen by 5.2% over the past year, with earnings forecast to grow by 13% annually. In this fluctuating environment, identifying stocks that may be trading below their estimated value can present opportunities for investors seeking potential growth and stability.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
Name | Current Price | Fair Value (Est) | Discount (Est) |
LaserBond (ASX:LBL) | A$0.70 | A$1.37 | 48.9% |
Elders (ASX:ELD) | A$9.28 | A$18.11 | 48.8% |
Telix Pharmaceuticals (ASX:TLX) | A$17.99 | A$33.20 | 45.8% |
Regal Partners (ASX:RPL) | A$3.28 | A$6.39 | 48.6% |
Nanosonics (ASX:NAN) | A$2.98 | A$5.82 | 48.8% |
Domino's Pizza Enterprises (ASX:DMP) | A$31.72 | A$63.35 | 49.9% |
Infomedia (ASX:IFM) | A$1.65 | A$3.06 | 46% |
Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
Little Green Pharma (ASX:LGP) | A$0.091 | A$0.17 | 46.3% |
Airtasker (ASX:ART) | A$0.28 | A$0.52 | 46.5% |
Let's explore several standout options from the results in the screener.
Domino's Pizza Enterprises
Overview: Domino's Pizza Enterprises Limited operates retail food outlets and has a market cap of A$2.88 billion.
Operations: The company's revenue from restaurants amounts to A$2.48 billion.
Estimated Discount To Fair Value: 49.9%
Domino's Pizza Enterprises is trading at A$31.72, significantly below its estimated fair value of A$63.35, indicating it may be undervalued based on cash flows. Despite a high debt level and recent shareholder dilution, the company’s earnings are forecast to grow 26.84% annually over the next three years, outpacing the broader Australian market's growth rate of 12.7%. However, profit margins have decreased from 6.7% to 2.2%, and revenue growth is expected to lag behind market averages at 4.5% per year.
Elders
Overview: Elders Limited, with a market cap of A$1.47 billion, provides agricultural products and services to rural and regional customers primarily in Australia.
Operations: Elders generates revenue through its Branch Network (A$2.54 billion), Wholesale Products (A$341.19 million), and Feed and Processing Services (A$120.14 million).
Estimated Discount To Fair Value: 48.8%
Elders Limited, trading at A$9.28, is significantly undervalued with an estimated fair value of A$18.11. Despite a high level of debt and declining profit margins (2.1% vs 3.4% last year), earnings are forecast to grow 22.8% annually, outpacing the Australian market's growth rate of 12.7%. Recent reaffirmation of earnings guidance for fiscal year 2024 supports underlying EBIT between A$120 million to A$140 million, highlighting strong cash flow potential amidst current valuation discrepancies.
According our earnings growth report, there's an indication that Elders might be ready to expand.
Take a closer look at Elders' balance sheet health here in our report.
Flight Centre Travel Group
Overview: Flight Centre Travel Group Limited (ASX:FLT) is a global company offering travel retailing services for both leisure and corporate sectors across various regions, with a market cap of A$4.52 billion.
Operations: Flight Centre Travel Group Limited generates revenue primarily from its leisure segment (A$1.28 billion) and corporate segment (A$1.06 billion).
Estimated Discount To Fair Value: 38.3%
Flight Centre Travel Group, trading at A$20.54, is significantly undervalued with an estimated fair value of A$33.3. Despite revenue growth forecasted at 9.3% per year—slower than 20% annually—earnings are expected to grow significantly over the next three years, outpacing the Australian market's growth rate of 12.7%. The company became profitable this year and is projected to achieve a high return on equity of 22.3% in three years, underscoring its strong cash flow potential amidst current valuation discrepancies.
Where To Now?
Unlock more gems! Our Undervalued ASX Stocks Based On Cash Flows screener has unearthed 32 more companies for you to explore.Click here to unveil our expertly curated list of 35 Undervalued ASX Stocks Based On Cash Flows.
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Curious About Other Options?
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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 ASX:DMP ASX:ELD and ASX:FLT.
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