Exploring Three Elite German Exchange Stocks Estimated To Be Undervalued By 30.3% To 40.1%

As European markets show signs of recovery, with Germany's DAX index recently marking a notable gain, investors are keenly watching for opportunities. In this context, identifying stocks that appear undervalued becomes particularly compelling, offering potential for significant adjustments to their market valuations in light of current economic conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Germany

Name	Current Price	Fair Value (Est)	Discount (Est)
Kontron (XTRA:SANT)	€19.20	€31.32	38.7%
Novem Group (XTRA:NVM)	€5.56	€10.77	48.4%
Verbio (XTRA:VBK)	€17.47	€28.16	38%
MTU Aero Engines (XTRA:MTX)	€220.90	€397.82	44.5%
Stratec (XTRA:SBS)	€45.25	€79.74	43.3%
CHAPTERS Group (XTRA:CHG)	€23.00	€44.74	48.6%
SBF (DB:CY1K)	€3.20	€5.29	39.5%
Your Family Entertainment (DB:RTV)	€2.40	€4.08	41.2%
Redcare Pharmacy (XTRA:RDC)	€118.50	€197.69	40.1%
Dr. Hönle (XTRA:HNL)	€19.80	€33.21	40.4%

Click here to see the full list of 32 stocks from our Undervalued German Stocks Based On Cash Flows screener.

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

adidas

Overview: Adidas AG operates globally, designing, developing, producing, and marketing athletic and sports lifestyle products across multiple regions, with a market capitalization of approximately €39.67 billion.

Operations: The company generates revenue from various regions, with €5.16 billion from North America, €3.20 billion from Greater China, and €2.31 billion from Latin America.

Estimated Discount To Fair Value: 30.3%

Adidas AG, priced at €222.2, is currently trading 30.3% below its estimated fair value of €318.7, indicating significant undervaluation based on discounted cash flow analysis. Recently turning profitable with a net income of €170 million in Q1 2024, Adidas has shown a promising recovery with earnings per share improving from a loss last year to €0.95. The company's earnings are expected to grow by 41.3% annually over the next three years, outpacing the German market's growth forecast of 18.6%. Additionally, revenue growth is projected at 7.9% per year, also above the market average.

• The analysis detailed in our adidas growth report hints at robust future financial performance.

• Unlock comprehensive insights into our analysis of adidas stock in this financial health report.

XTRA:ADS Discounted Cash Flow as at Jun 2024

Redcare Pharmacy

Overview: Redcare Pharmacy NV is an online pharmacy operating across the Netherlands, Germany, Italy, Belgium, Switzerland, Austria, and France with a market capitalization of approximately €2.41 billion.

Operations: The company generates revenue primarily from two segments: the DACH region (Germany, Austria, Switzerland) contributing €1.62 billion and other international markets adding €0.37 billion.

Estimated Discount To Fair Value: 40.1%

Redcare Pharmacy is currently valued at €118.5, well below its fair value of €197.69, highlighting a significant undervaluation based on discounted cash flow. Despite recent shareholder dilution, the company's revenue growth at 17% annually outstrips the German market's 5.2%, with profitability expected within three years. Q1 2024 showed improved sales of €560.22 million and a reduced net loss of €7.81 million compared to last year, indicating positive financial momentum despite ongoing challenges.

• According our earnings growth report, there's an indication that Redcare Pharmacy might be ready to expand.

• Click here to discover the nuances of Redcare Pharmacy with our detailed financial health report.

XTRA:RDC Discounted Cash Flow as at Jun 2024

SAP

Overview: SAP SE, along with its subsidiaries, operates globally offering applications, technology, and services with a market capitalization of approximately €215.58 billion.

Operations: The company generates €31.81 billion in revenue from its Applications, Technology & Services segment.

Estimated Discount To Fair Value: 31.6%

SAP SE, a significant entity in the tech sector, is currently trading below its fair value by over 20%, indicating potential undervaluation based on discounted cash flows. Despite this, earnings are expected to grow at an impressive rate of 33.5% annually over the next three years, outpacing the German market's forecasted growth. However, its revenue growth projection of 9.3% per year is modest compared to some industry peers. Recent strategic alliances and product enhancements underscore SAP's commitment to innovation and market expansion, which could support future financial performance despite current challenges like a substantial one-time financial impact reflected in recent earnings reports.

• Insights from our recent growth report point to a promising forecast for SAP's business outlook.

• Click here and access our complete balance sheet health report to understand the dynamics of SAP.

XTRA:SAP Discounted Cash Flow as at Jun 2024

Turning Ideas Into Actions

• Unlock our comprehensive list of 32 Undervalued German Stocks Based On Cash Flows by clicking here.

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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 XTRA:ADSXTRA:RDC and

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