Discover essential financial strategies tailored for your immediate family. Secure their future with budgeting tips, investment advice, and effective planning to ensure lasting financial stability.
Discover essential financial strategies tailored for your immediate family. Secure their future with budgeting tips, investment advice, and effective planning to ensure lasting financial stability.
As the U.S. stock market experiences fluctuations with a stumbling Santa Claus rally and a downturn in major indices, investors are keenly observing opportunities amidst this volatility. In such an environment, identifying undervalued stocks can be pivotal, as these equities may offer potential value when their market price is significantly below their intrinsic worth.
Let’s take a closer look at a couple of our picks from the screened companies.
Overview: Zillow Group, Inc. operates real estate brands through mobile applications and websites in the United States, with a market cap of approximately $17.83 billion.
Operations: Zillow Group generates revenue through its diverse real estate services offered via mobile apps and websites across the United States.
Estimated Discount To Fair Value: 39.5%
Zillow Group is trading at a significant discount to its estimated fair value, with shares priced at US$73.8 against a fair value estimate of US$121.93, suggesting potential undervaluation based on cash flows. Despite reporting a net loss for Q3 2024, revenue increased to US$581 million from the previous year, and earnings are projected to grow significantly in the coming years as Zillow aims for profitability within three years.
NasdaqGS:ZG Discounted Cash Flow as at Dec 2024
Overview: KeyCorp, with a market cap of approximately $17.22 billion, operates as the holding company for KeyBank National Association, offering a range of retail and commercial banking products and services in the United States.
Operations: KeyBank National Association generates revenue primarily through its Consumer Bank segment, which accounts for $3.09 billion, and its Commercial Bank segment, contributing $2.85 billion.
Estimated Discount To Fair Value: 34.5%
KeyCorp is currently trading at US$17.37, significantly below its estimated fair value of US$26.53, highlighting potential undervaluation based on cash flows. Despite a recent net loss of US$410 million for Q3 2024 and a decline in profit margins from the previous year, earnings are forecast to grow substantially by 71.9% annually, outpacing the broader U.S. market growth rate of 15.3%.
NYSE:KEY Discounted Cash Flow as at Dec 2024
Overview: Vertiv Holdings Co designs, manufactures, and services critical digital infrastructure technologies for data centers and communication networks globally, with a market cap of approximately $44.57 billion.
Operations: The company’s revenue segments are comprised of $4.30 billion from the Americas, $1.74 billion from the Asia Pacific, and $2.13 billion from Europe, the Middle East, and Africa.
Estimated Discount To Fair Value: 13.9%
Vertiv Holdings Co is trading at US$118.74, below its estimated fair value of US$137.86, suggesting potential undervaluation based on cash flows. Despite high debt levels and recent significant insider selling, earnings are forecast to grow 30.6% annually, surpassing the U.S. market’s growth rate. Recent initiatives include repricing a $2.1 billion term loan for interest savings and launching energy-efficient products like the Vertiv PowerUPS 9000 to enhance operational efficiency in data centers globally.
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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 NasdaqGS:ZG NYSE:KEY and NYSE:VRT.
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