The United States market remained flat over the last week, though it has experienced a 5.7% rise over the past 12 months, with earnings forecasted to grow by 13% annually. In this environment of steady growth, identifying undervalued stocks can offer investors opportunities to capitalize on potential gains as these stocks may be poised to benefit from improving earnings prospects.

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

Click here to see the full list of 172 stocks from our Undervalued US Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

Futu Holdings

Overview: Futu Holdings Limited operates as a digitalized securities brokerage and wealth management product distributor in Hong Kong and internationally, with a market cap of approximately $11.21 billion.

Operations: Futu Holdings generates revenue primarily from its online brokerage services and margin financing services, amounting to HK$11.97 billion.

Estimated Discount To Fair Value: 44.2%

Futu Holdings is trading at US$79.65, significantly below its estimated fair value of US$142.65, presenting a potential undervaluation based on discounted cash flow analysis. The company reported strong financial performance with substantial revenue and net income growth for 2024. Despite recent share price volatility, Futu's earnings are forecast to grow faster than the US market at 19.3% annually, supported by robust revenue projections outpacing market averages.

• The growth report we've compiled suggests that Futu Holdings' future prospects could be on the up.
• Take a closer look at Futu Holdings' balance sheet health here in our report.

Duolingo

Overview: Duolingo, Inc. is a mobile learning platform that operates in the United States, the United Kingdom, and internationally with a market cap of approximately $14.77 billion.

Operations: The company's revenue primarily comes from its educational software segment, generating $748.02 million.

Estimated Discount To Fair Value: 28.7%

Duolingo is trading at US$326.5, significantly below its estimated fair value of US$458.09, suggesting potential undervaluation based on discounted cash flow analysis. The company has demonstrated robust financial growth, with 2024 sales reaching US$748.02 million and net income rising to US$88.57 million. Despite insider selling, Duolingo's earnings are projected to grow significantly faster than the market average over the next three years, supported by strong revenue forecasts and recent strategic expansions like Duo's Treehouse initiative.

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

Estée Lauder Companies

Overview: The Estée Lauder Companies Inc. is a global manufacturer, marketer, and seller of skincare, makeup, fragrance, and hair care products with a market cap of approximately $18.94 billion.

Operations: The company generates revenue from various segments, including $7.55 billion from skin care, $4.43 billion from makeup, $2.49 billion from fragrance, and $606 million from hair care products.

Estimated Discount To Fair Value: 19.7%

Estée Lauder Companies is trading at US$54.47, below its estimated fair value of US$67.83, indicating potential undervaluation based on discounted cash flow analysis. Despite a recent net loss and high debt levels, the company forecasts strong earnings growth over the next three years. Recent strategic alliances, such as with Serpin Pharma for innovative skincare solutions, may enhance product offerings and support long-term financial performance amidst current revenue challenges in travel retail markets.

• According our earnings growth report, there's an indication that Estée Lauder Companies might be ready to expand.
• Unlock comprehensive insights into our analysis of Estée Lauder Companies stock in this financial health report.

Summing It All Up

• Investigate our full lineup of 172 Undervalued US Stocks Based On Cash Flows right here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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.

Companies discussed in this article include NasdaqGM:FUTU NasdaqGS:DUOL and NYSE:EL.

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