Zillow Group Lists Trio of Value Stock Recommendations on US Stock Exchange for Investor Review

As the U.S. stock market continues to reach new heights, fueled by technological advances and enthusiasm for AI, investors are keeping a close eye out for opportunities that may be undervalued in this buoyant environment. Identifying stocks with potential value requires understanding both the broader economic indicators and the specific industry dynamics currently influencing market conditions.

The 10 most undervalued stocks in the US based on their cash flow

Click here to see the full list of 174 stocks from our Undervalued U.S. Stocks Based on Cash Flow screener.

Let’s examine some outstanding options from the results in the screener

Overview: Zillow Group, Inc. is a company that operates various real estate brands through mobile applications and websites in the United States and has a market capitalization of approximately $10.98 billion.

Operations: The company generates its revenue primarily through Internet information providers; total revenue amounts to approximately 2.01 billion US dollars.

Estimated discount to fair value: 44.2%

Zillow Group is significantly undervalued based on its cash flows, trading at $47.55, well below its estimated fair value of $85.29. Despite a low projected return on equity of 10% in three years, Zillow is expected to become profitable. Projected earnings growth is 63.16% per year, and revenue growth is expected to outperform the U.S. market at 10.8% per year. Recent initiatives such as the open-source Fair Housing Classifier underscore Zillow’s commitment to fair real estate practices and could strengthen its market position and investor confidence.

Overview: The Clorox Company, with a market capitalization of $17.13 billion, operates worldwide and manufactures and markets consumer and commercial products.

Operations: The company’s revenue is distributed across several main segments: Household $2.02 billion, Lifestyle $1.28 billion, International $1.20 billion, and Health & Wellness $2.48 billion.

Estimated discount to fair value: 35.5%

Clorox currently trades at $138.63, well below its estimated fair value of $214.91, suggesting severe undervaluation based on cash flows. Despite this, Clorox faces challenges with dividend coverage and high debt. Earnings are expected to grow 32.69% annually, beating the U.S. market forecast of 14.8%. However, revenue growth is lagging market expectations at 2.8% annually. Recent strategic moves include seeking mergers and acquisitions to potentially improve the growth trajectory, as CFO Kevin Jacobsen explained earlier this month.

Overview: Vertiv Holdings Co (NYSE: VRT) specializes in the design, manufacture and maintenance of critical digital infrastructure technologies and lifecycle services for data centers, communications networks, and commercial and industrial environments worldwide and has a market capitalization of approximately $33.52 billion.

Operations: Vertiv’s revenue is distributed across the Americas at $3.95 billion, Asia-Pacific at $1.64 billion, and Europe, the Middle East and Africa at $1.83 billion.

Estimated discount to fair value: 11.2%

Vertiv Holdings Co is considered undervalued at a price of $95.34 compared to its fair value of $107.39, a modest discount. The company’s earnings are expected to grow at a compound annual growth rate of 30.27% over the next three years, outperforming the U.S. market average. However, the company is heavily leveraged and has experienced significant insider selling recently, which may raise concerns about its financial health despite strong revenue growth forecasts of 9.9% per year and robust future profitability projections.

Make it happen

• Navigate through the entire inventory of 174 US stocks undervalued based on cash flow here.
• Have you already invested in these stocks? Stay up to date with all the developments by setting up a portfolio with Simply Wall St. We make it easy for investors like you to stay informed and proactive.
• Take control of your financial future with Simply Wall St and benefit from free, in-depth knowledge of the international markets for every investor.

Looking for other investments?

This Simply Wall St article is of a general nature. We provide commentary based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks, and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

Do you have feedback on this article? Are you interested in the content? Contact us directly. Alternatively, send an email to [email protected]