The United Kingdom's stock market has recently experienced a downturn, with the FTSE 100 and FTSE 250 indices both closing lower amid concerns over weak trade data from China, highlighting global economic challenges. In such an environment, identifying stocks that might be priced below their estimated value can offer potential opportunities for investors seeking to navigate these uncertain times.

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

Click here to see the full list of 53 stocks from our Undervalued UK Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

NIOX Group

Overview: NIOX Group Plc designs, develops, and commercializes medical devices for asthma diagnosis, monitoring, and management globally with a market capitalization of £284.18 million.

Operations: The company generates revenue of £41.80 million from its NIOX® segment, which focuses on medical devices for asthma-related applications.

Estimated Discount To Fair Value: 32.6%

NIOX Group is trading at £0.68, significantly below its estimated fair value of £1.01, suggesting it may be undervalued based on cash flows. Despite a volatile share price and insider selling, NIOX's earnings are forecast to grow substantially at 37.5% annually, outpacing the UK market's growth rate. Recent M&A interest was withdrawn due to macroeconomic conditions, though the company reported increased revenue of £41.8 million for 2024 despite lower profit margins compared to the previous year.

• Insights from our recent growth report point to a promising forecast for NIOX Group's business outlook.
• Click here to discover the nuances of NIOX Group with our detailed financial health report.

AstraZeneca

Overview: AstraZeneca PLC is a biopharmaceutical company engaged in the discovery, development, manufacture, and commercialization of prescription medicines, with a market cap of approximately £163.96 billion.

Operations: AstraZeneca's revenue primarily stems from its biopharmaceuticals segment, generating $54.98 billion.

Estimated Discount To Fair Value: 41.4%

AstraZeneca is trading at £105.74, significantly below its estimated fair value of £180.59, highlighting potential undervaluation based on cash flows. Despite a high debt level and an unstable dividend track record, AstraZeneca's earnings are forecast to grow faster than the UK market at 15.3% annually. Recent strategic alliances and product approvals could bolster revenue growth, projected to outpace the UK market at 5.5% per year, enhancing its financial position amidst ongoing sector challenges.

• The growth report we've compiled suggests that AstraZeneca's future prospects could be on the up.
• Delve into the full analysis health report here for a deeper understanding of AstraZeneca.

Bridgepoint Group

Overview: Bridgepoint Group plc is a private equity and private credit firm that focuses on middle market, lower mid-market, small mid cap, small cap, growth capital, buyouts investments, syndicate debt, infrastructure, direct lending and credit opportunities in private credit investments with a market cap of £2.34 billion.

Operations: Bridgepoint Group's revenue is primarily derived from four segments: Credit (£75.70 million), Infrastructure (£72.50 million), and Private Equity (£275.60 million).

Estimated Discount To Fair Value: 14.1%

Bridgepoint Group, trading at £2.83, is undervalued relative to its fair value of £3.30 based on cash flow analysis, though the margin isn't substantial. Earnings are expected to grow significantly at 32.6% annually, outpacing the UK market's 14.5%. However, profit margins have declined from last year and dividends remain poorly covered by earnings or free cash flows. Recent revenue growth and a declared final dividend of 4.6 pence per share reflect ongoing financial adjustments amidst market volatility.

• According our earnings growth report, there's an indication that Bridgepoint Group might be ready to expand.
• Unlock comprehensive insights into our analysis of Bridgepoint Group stock in this financial health report.

Where To Now?

• Click through to start exploring the rest of the 50 Undervalued UK Stocks Based On Cash Flows now.
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Seeking Other Investments?

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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 AIM:NIOX LSE:AZN and LSE:BPT.

This article was originally published by Simply Wall St.

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