European Stocks That Investors Might Be Undervaluing

April 24, 2025

Amid recent trade uncertainties and economic shifts, European markets have seen a positive upswing, with the STOXX Europe 600 Index rising by nearly 4% as investor sentiment was buoyed by the European Central Bank’s rate cuts. In this environment of cautious optimism and policy adjustments, identifying undervalued stocks can be particularly appealing for investors seeking opportunities that might not yet reflect their full potential in market pricing.

Name

Current Price

Fair Value (Est)

Discount (Est)

Micro Systemation (OM:MSAB B)

SEK49.265

SEK96.49

48.9%

LPP (WSE:LPP)

PLN15695.00

PLN30654.82

48.8%

Pharma Mar (BME:PHM)

€80.80

€158.16

48.9%

Lindab International (OM:LIAB)

SEK190.30

SEK372.38

48.9%

TF Bank (OM:TFBANK)

SEK347.50

SEK683.01

49.1%

Mo-BRUK (WSE:MBR)

PLN316.50

PLN621.01

49%

LINK Mobility Group Holding (OB:LINK)

NOK22.70

NOK44.01

48.4%

Jerónimo Martins SGPS (ENXTLS:JMT)

€21.40

€42.22

49.3%

MedinCell (ENXTPA:MEDCL)

€14.70

€28.62

48.6%

Longino & Cardenal (BIT:LON)

€1.36

€2.71

49.8%

Click here to see the full list of 177 stocks from our Undervalued European Stocks Based On Cash Flows screener.

Let’s dive into some prime choices out of the screener.

Overview: Pharma Mar, S.A. is a biopharmaceutical company focused on the research, development, production, and commercialization of bio-active principles for oncology across various international markets, with a market cap of €1.42 billion.

Operations: The company’s revenue is primarily derived from its Oncology segment, which generated €174.59 million, and a minor contribution from RNA Interference (RNAi) amounting to €0.26 million.

Estimated Discount To Fair Value: 48.9%

Pharma Mar’s stock is trading at €80.8, significantly below its estimated fair value of €158.16, suggesting it may be undervalued based on cash flows. Despite a volatile share price, earnings are forecast to grow by 40.07% annually, outpacing the Spanish market’s growth rate of 5.8%. Recent financials show revenue growth from €158.15 million to €174.86 million and net income surging from €1.14 million to €26.13 million year-over-year.

BME:PHM Discounted Cash Flow as at Apr 2025
BME:PHM Discounted Cash Flow as at Apr 2025

Overview: ASML Holding N.V. specializes in lithography solutions for the semiconductor industry, encompassing development, production, marketing, sales, upgrading, and servicing of advanced equipment systems with a market cap of approximately €228.46 billion.

Operations: ASML’s revenue primarily comes from its Semiconductor Equipment and Services segment, which generated €30.71 billion.

Estimated Discount To Fair Value: 11.6%

ASML Holding is trading at €580.9, below its estimated fair value of €657.3, indicating potential undervaluation based on cash flows. The company’s earnings rose by 22.3% over the past year and are projected to grow annually by 12.5%, surpassing the Dutch market’s average growth rate of 11%. Recent earnings reported a net income increase to €2.36 billion from €1.22 billion year-over-year, reflecting strong financial performance despite insider selling activity recently observed.

ENXTAM:ASML Discounted Cash Flow as at Apr 2025
ENXTAM:ASML Discounted Cash Flow as at Apr 2025

Overview: HMS Networks AB (publ) provides products that facilitate communication and information sharing for industrial equipment globally, with a market cap of SEK20.71 billion.

Operations: HMS Networks generates revenue through its products that enable communication and information sharing for industrial equipment worldwide.

Estimated Discount To Fair Value: 23.3%

HMS Networks, trading at SEK412.8, is undervalued with an estimated fair value of SEK538.36, offering potential based on cash flow analysis. Despite a decrease in net profit margin from 17.6% to 9.5%, earnings are projected to grow significantly at 33.4% annually over the next three years, outpacing the Swedish market’s growth of 13.1%. Recent Q1 sales rose to SEK890 million from SEK616 million year-over-year, indicating robust revenue performance amidst strategic acquisitions and no dividend payout this year.

OM:HMS Discounted Cash Flow as at Apr 2025
OM:HMS Discounted Cash Flow as at Apr 2025

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 BME:PHM ENXTAM:ASML and OM:HMS.

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