As the S&P 500 reaches new record highs, investors are keeping a close eye on market dynamics and potential opportunities within the U.S. stock exchanges. In this environment, identifying stocks that may be trading below their estimated value can offer intriguing prospects for those looking to capitalize on potential market inefficiencies.

Top 5 Undervalued Stocks Based On Cash Flows In The United States

Click here to see the full list of 163 stocks from our Undervalued US Stocks Based On Cash Flows screener.

We'll examine a selection from our screener results.

CoStar Group

Overview: CoStar Group, Inc. offers information, analytics, and online marketplace services to professionals in the commercial real estate, hospitality, and residential industries across various regions including the United States, Canada, Europe, Asia Pacific, and Latin America with a market cap of approximately $30.94 billion.

Operations: CoStar Group's revenue from Internet Information Providers amounts to $2.74 billion.

Estimated Discount To Fair Value: 13.2%

CoStar Group is trading at US$79.21, below its estimated fair value of US$91.29, suggesting potential undervaluation based on cash flows. Revenue growth is expected to outpace the broader market, with a forecast of 11.1% annually. Despite a decline in profit margins from 15.3% to 5.1%, earnings are projected to grow significantly at 34.9% per year, highlighting robust future prospects amidst recent strategic client partnerships and a substantial share repurchase program worth US$500 million.

• The analysis detailed in our CoStar Group growth report hints at robust future financial performance.
• Click here to discover the nuances of CoStar Group with our detailed financial health report.

Mobileye Global

Overview: Mobileye Global Inc. develops and deploys advanced driver assistance systems and autonomous driving technologies worldwide, with a market cap of approximately $15.33 billion.

Operations: The company's revenue primarily comes from its advanced driver assistance systems and autonomous driving technologies, totaling $1.61 billion.

Estimated Discount To Fair Value: 37.6%

Mobileye Global, priced at US$18.13, trades significantly below its fair value estimate of US$29.04, indicating potential undervaluation based on cash flows. Despite recent financial setbacks with a net loss of US$71 million in Q4 2024 and projected operating losses for 2025, revenue is expected to grow at 17.9% annually—outpacing the broader market—and earnings are anticipated to increase substantially by over 100% per year as profitability approaches within three years.

• Our growth report here indicates Mobileye Global may be poised for an improving outlook.
• Click here and access our complete balance sheet health report to understand the dynamics of Mobileye Global.

Palo Alto Networks

Overview: Palo Alto Networks, Inc. is a global provider of cybersecurity solutions with a market cap of approximately $137.90 billion.

Operations: The company generates revenue primarily from its Security Software & Services segment, which amounts to $8.57 billion.

Estimated Discount To Fair Value: 17.8%

Palo Alto Networks, trading at US$205.19, is valued below its fair value estimate of US$249.67, reflecting potential undervaluation based on cash flows. Despite a decline in net profit margins compared to last year and significant insider selling recently, the company's revenue and earnings are projected to grow faster than the US market. Recent product innovations in cloud security and strategic board appointments may enhance long-term growth prospects amidst evolving cybersecurity demands.

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

Turning Ideas Into Actions

• Explore the 163 names from our Undervalued US Stocks Based On Cash Flows screener here.
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Contemplating Other Strategies?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• 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 NasdaqGS:CSGP NasdaqGS:MBLY and NasdaqGS:PANW.

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