The Australian market has climbed 1.7% in the last 7 days and 17% over the past year, with earnings forecast to grow by 12% annually. In this promising environment, identifying stocks trading below their intrinsic value can offer significant opportunities for investors looking to capitalize on potential growth.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Click here to see the full list of 48 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Codan

Overview: Codan Limited (ASX:CDA) develops technology solutions for United Nations organizations, security and military groups, government departments, individuals, and small-scale miners with a market cap of A$2.96 billion.

Operations: Codan's revenue segments include Communications at A$326.91 million and Metal Detection at A$219.85 million.

Estimated Discount To Fair Value: 10.3%

Codan Limited, recently added to the S&P/ASX 200 Index, reported strong financial performance with sales of A$550.46 million and net income of A$81.39 million for FY2024. The company is trading at A$16.33, below its estimated fair value of A$18.21, suggesting it may be undervalued based on cash flows. With earnings forecasted to grow at 17.6% annually, Codan's growth prospects outpace the broader Australian market’s expected growth rates.

• Our comprehensive growth report raises the possibility that Codan is poised for substantial financial growth.
• Click here and access our complete balance sheet health report to understand the dynamics of Codan.

IDP Education

Overview: IDP Education Limited specializes in placing students into educational institutions across Australia, the United Kingdom, the United States, Canada, New Zealand, and Ireland and has a market cap of A$4.44 billion.

Operations: The company's revenue from Educational Services - Education & Training Services amounts to A$1.04 billion.

Estimated Discount To Fair Value: 42.8%

IDP Education is trading at A$15.95, significantly below its estimated fair value of A$27.89, indicating it is undervalued based on discounted cash flow analysis. Despite a forecasted revenue growth of 7.4% per year and earnings growth of 14.1% annually, recent financial results showed a decline in net income to A$132.75 million from A$148.52 million last year, with diluted EPS dropping to A$0.4758 from A$0.5328 previously.

• According our earnings growth report, there's an indication that IDP Education might be ready to expand.
• Get an in-depth perspective on IDP Education's balance sheet by reading our health report here.

Mader Group

Overview: Mader Group Limited (ASX:MAD) is a contracting company that offers specialist technical services in the mining, energy, and industrial sectors both in Australia and internationally, with a market cap of A$1.06 billion.

Operations: Mader Group's revenue from Staffing & Outsourcing Services amounts to A$774.47 million.

Estimated Discount To Fair Value: 49.7%

Mader Group is trading at A$5.24, significantly below its estimated fair value of A$10.41, highlighting its undervaluation based on discounted cash flow analysis. The company reported strong financial results with revenue of A$774.47 million and net income of A$50.42 million for fiscal 2024, reflecting substantial year-on-year growth. Analysts forecast continued robust earnings growth at 13.5% annually, outpacing the broader Australian market's 12.1%. Recent inclusion in the S&P Global BMI Index further underscores its potential.

• Our earnings growth report unveils the potential for significant increases in Mader Group's future results.
• Unlock comprehensive insights into our analysis of Mader Group stock in this financial health report.

Make It Happen

• Unlock more gems! Our Undervalued ASX Stocks Based On Cash Flows screener has unearthed 45 more companies for you to explore.Click here to unveil our expertly curated list of 48 Undervalued ASX Stocks Based On Cash Flows.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
• Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Curious About Other Options?

• 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 ASX:CDA ASX:IEL and ASX:MAD.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com