3 ASX Stocks Estimated To Be Undervalued By Up To 30.9%
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In the last week, the Australian market has been flat, but it is up 20% over the past year with earnings forecasted to grow by 12% annually. In this environment, identifying stocks that are potentially undervalued can offer investors opportunities to capitalize on growth while maintaining a margin of safety.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Westgold Resources (ASX:WGX) | A$3.13 | A$6.25 | 49.9% |
| Telix Pharmaceuticals (ASX:TLX) | A$21.46 | A$41.66 | 48.5% |
| Ansell (ASX:ANN) | A$31.43 | A$58.31 | 46.1% |
| IDP Education (ASX:IEL) | A$13.70 | A$27.37 | 50% |
| Ingenia Communities Group (ASX:INA) | A$4.94 | A$9.40 | 47.5% |
| Genesis Minerals (ASX:GMD) | A$2.44 | A$4.78 | 48.9% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Megaport (ASX:MP1) | A$7.15 | A$13.42 | 46.7% |
| Structural Monitoring Systems (ASX:SMN) | A$0.65 | A$1.27 | 48.7% |
| Energy One (ASX:EOL) | A$5.53 | A$11.05 | 50% |
Let's dive into some prime choices out of the screener.
Life360
Overview: Life360, Inc. operates a technology platform for locating people, pets, and things across North America, Europe, the Middle East, Africa, and internationally with a market cap of A$4.91 billion.
Operations: The company generates revenue of $328.68 million from its Software & Programming segment.
Estimated Discount To Fair Value: 24.7%
Life360 is trading at A$21.9, approximately 24.7% below its estimated fair value of A$29.09, suggesting it may be undervalued based on cash flows. Despite recent insider selling and past shareholder dilution, the company is expected to achieve profitability within three years with earnings projected to grow significantly annually. Recent product innovations and expanded partnerships are anticipated to enhance revenue streams, supporting Life360's strategic growth trajectory in the competitive market landscape.
Cettire
Overview: Cettire Limited operates as an online luxury goods retailer in Australia, the United States, and internationally, with a market cap of A$815.85 million.
Operations: The company's revenue primarily comes from online retail sales, amounting to A$742.26 million.
Estimated Discount To Fair Value: 27.5%
Cettire, trading at A$2.14, is approximately 27.5% below its estimated fair value of A$2.95, highlighting potential undervaluation based on cash flows. Despite a decline in net profit margin from 3.8% to 1.4%, earnings are forecast to grow significantly at 29% annually over the next three years, outpacing the Australian market's growth rate. Recent board changes and robust revenue guidance for fiscal Q1 2025 further underscore Cettire's strategic positioning in the market.