In the last week, the Australian market has been flat, but it is up 10.0% over the past year with earnings forecast to grow by 12% annually. In this context, identifying stocks with strong growth potential and solid fundamentals can be particularly rewarding for investors looking to capitalize on these promising conditions.

Top 10 Undiscovered Gems With Strong Fundamentals In Australia

Click here to see the full list of 53 stocks from our ASX Undiscovered Gems With Strong Fundamentals screener.

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

DroneShield

Simply Wall St Value Rating: ★★★★★★

Overview: DroneShield Limited develops, commercializes, and sells hardware and software technology for drone detection and security in Australia and the United States, with a market cap of A$1.08 billion.

Operations: DroneShield Limited generates revenue primarily from its Aerospace & Defense segment, amounting to A$67.52 million. The company focuses on hardware and software technology for drone detection and security across Australia and the United States.

DroneShield has shown remarkable earnings growth of 612.7% over the past year, outpacing the Aerospace & Defense industry average of 15.4%. Despite this, its share price has been highly volatile in the last three months. The company reported sales of A$23.99 million for H1 2024, up from A$11.55 million a year ago; however, net loss widened to A$4.8 million from A$2.94 million previously. Notably, DroneShield is debt-free and recently completed a follow-on equity offering worth A$120 million.

• Navigate through the intricacies of DroneShield with our comprehensive health report here.

• Gain insights into DroneShield's past trends and performance with our Past report.

Navigator Global Investments

Simply Wall St Value Rating: ★★★★★☆

Overview: Navigator Global Investments (ASX:NGI) is a fund management company operating in Australia with a market cap of A$838.03 million.

Operations: Navigator Global Investments generates revenue primarily from its Lighthouse segment, amounting to $95.93 million. The company also has a minor revenue contribution of $0.25 million from other corporate adjustments, bringing total revenues to approximately $96.18 million.

Navigator Global Investments (NGI) has shown impressive growth, with earnings surging 86.7% over the past year, far outpacing the Capital Markets industry’s 17.7%. The company reported a net income of US$66.31 million for the fiscal year ending June 30, 2024, up from US$35.51 million previously. Despite substantial shareholder dilution in the past year, NGI trades at a significant discount to its estimated fair value by about 55.7%, presenting potential upside for investors seeking undervalued opportunities in Australia’s financial sector.

• Click to explore a detailed breakdown of our findings in Navigator Global Investments' health report.

• Explore historical data to track Navigator Global Investments' performance over time in our Past section.

Supply Network

Simply Wall St Value Rating: ★★★★★★

Overview: Supply Network Limited supplies aftermarket parts to the commercial vehicle industry in Australia and New Zealand, with a market cap of A$1.19 billion.

Operations: Supply Network Limited generates revenue of A$302.72 million from providing aftermarket parts for the commercial vehicle market in Australia and New Zealand.

Supply Network has shown robust performance, with earnings growing 20.5% over the past year, outpacing the Retail Distributors industry’s 2.3%. For the full year ending June 2024, sales reached A$302.6 million, up from A$252.25 million last year, while net income rose to A$33.03 million from A$27.41 million. The company’s debt to equity ratio improved significantly over five years from 24.6% to 9.3%, and its interest payments are well covered by EBIT at 22.6x coverage.

• Unlock comprehensive insights into our analysis of Supply Network stock in this health report.

• Assess Supply Network's past performance with our detailed historical performance reports.

Where To Now?

• Navigate through the entire inventory of 53 ASX Undiscovered Gems With Strong Fundamentals here.

• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.

• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

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:DRO ASX:NGI and ASX:SNL.

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