As the S&P 500 extends its winning streak and investors await the Federal Reserve's decision on interest rates, the U.S. stock market is showing signs of cautious optimism. Amid this environment, identifying undervalued stocks can offer compelling opportunities for those looking to capitalize on potential growth and stability.

Top 10 Undervalued Stocks Based On Cash Flows In The United States

Click here to see the full list of 191 stocks from our Undervalued US Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

Enphase Energy

Overview: Enphase Energy, Inc., with a market cap of $15.10 billion, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry both in the United States and internationally.

Operations: Revenue from the design, manufacture, and sale of solutions for the solar photovoltaic industry amounted to $1.42 billion.

Estimated Discount To Fair Value: 47.1%

Enphase Energy is trading at US$118.53, significantly below its estimated fair value of US$224.25, suggesting it may be undervalued based on cash flows. Despite a decline in profit margins from 20.5% to 9.1% over the past year, Enphase's earnings are forecasted to grow at an impressive annual rate of 38.9%, outpacing the broader U.S. market's expected growth of 15.2%. Recent product innovations and strategic expansions further bolster its potential for future revenue growth and enhanced cash flow management.

• The growth report we've compiled suggests that Enphase Energy's future prospects could be on the up.

• Click here to discover the nuances of Enphase Energy with our detailed financial health report.

Zscaler

Overview: Zscaler, Inc. is a global cloud security company with a market cap of approximately $26.19 billion.

Operations: Zscaler generates revenue primarily through the sale of subscription services to its cloud platform and related support services, amounting to $2.17 billion.

Estimated Discount To Fair Value: 38.7%

Zscaler is trading at US$170.32, significantly below its estimated fair value of US$277.87, indicating it might be undervalued based on cash flows. Recent integrations with CrowdStrike enhance its security offerings, potentially driving future revenue growth. Despite a net loss reduction from US$202.34 million to US$57.71 million year-over-year, Zscaler's earnings are forecasted to grow 40.77% annually and become profitable within three years, outpacing the broader U.S. market's growth expectations.

• Our earnings growth report unveils the potential for significant increases in Zscaler's future results.

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

Eli Lilly

Overview: Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide with a market cap of approximately $831.58 billion.

Operations: Eli Lilly generates revenue primarily through the discovery, development, manufacturing, marketing, and sales of pharmaceutical products, amounting to $38.92 billion.

Estimated Discount To Fair Value: 17.1%

Eli Lilly, trading at US$906.18, is valued below its estimated fair value of US$1092.73. Forecasted earnings growth of 28.53% per year and revenue growth of 17.2% annually outpace the broader U.S. market's expectations, reflecting strong future cash flow potential despite high non-cash earnings and debt coverage concerns from operating cash flow. Recent FDA approval for new treatments like EBGLYSS and positive trial results bolster its financial outlook amidst executive changes and strategic collaborations in diagnostics and global access initiatives.

• Upon reviewing our latest growth report, Eli Lilly's projected financial performance appears quite optimistic.

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

Where To Now?

• Embark on your investment journey to our 191 Undervalued US Stocks Based On Cash Flows selection here.

• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.

• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

Want To Explore Some Alternatives?

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

• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.

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

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 NasdaqGM:ENPH NasdaqGS:ZS and NYSE:LLY.

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