The Australian stock market is poised for a positive rebound, with ASX futures indicating a 1.2% rise following strong performances on Wall Street and promising developments in US-Iran relations. In this environment of cautious optimism, identifying undervalued stocks can be crucial for investors looking to capitalize on potential growth opportunities amidst fluctuating economic conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name Current Price Fair Value (Est) Discount (Est) Wrkr (ASX:WRK) A$0.115 A$0.20 43.6% ReadyTech Holdings (ASX:RDY) A$1.3425 A$2.48 46% PEXA Group (ASX:PXA) A$13.12 A$24.52 46.5% NRW Holdings (ASX:NWH) A$7.14 A$12.88 44.6% Nickel Industries (ASX:NIC) A$1.10 A$2.20 49.9% Magellan Financial Group (ASX:MFG) A$9.08 A$16.23 44% Lovisa Holdings (ASX:LOV) A$23.20 A$41.28 43.8% Capricorn Metals (ASX:CMM) A$13.57 A$26.20 48.2% Boss Energy (ASX:BOE) A$1.45 A$2.63 44.8% Airtasker (ASX:ART) A$0.24 A$0.48 49.9%

Click here to see the full list of 37 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's explore several standout options from the results in the screener.

Capricorn Metals

Overview: Capricorn Metals Ltd, with a market cap of A$6.20 billion, explores, develops, evaluates, and produces gold in Australia through its subsidiaries.

Operations: The company generates revenue from its Karlawinda segment amounting to A$632.01 million.

Estimated Discount To Fair Value: 48.2%

Capricorn Metals appears undervalued, trading at A$13.57, significantly below its estimated future cash flow value of A$26.2. Recent earnings growth was robust, with net income rising to A$124.7 million from A$43.11 million a year ago, and revenue is forecast to grow 25.8% annually—outpacing the broader market's 6.4%. The company's return on equity is expected to reach a high 28.4% in three years, supporting its strong cash flow potential despite market challenges.

According our earnings growth report, there's an indication that Capricorn Metals might be ready to expand. Unlock comprehensive insights into our analysis of Capricorn Metals stock in this financial health report.ASX:CMM Discounted Cash Flow as at May 2026

Judo Capital Holdings

Overview: Judo Capital Holdings Limited, with a market cap of A$1.70 billion, provides a range of banking products and services specifically tailored for small and medium businesses in Australia through its subsidiaries.

Operations: The company's revenue primarily comes from its Small and Medium Enterprises (SMEs) Lending segment, which generated A$380.90 million.

Estimated Discount To Fair Value: 39.8%

Judo Capital Holdings is trading at A$1.52, well below its estimated future cash flow value of A$2.52, indicating significant undervaluation. Recent earnings results show net income increased to A$59.9 million from A$40.9 million year-over-year, with revenue growth forecasted at 16.6% annually—surpassing the Australian market's average growth rate of 6.4%. The appointment of David Stephen as a Non-Executive Director strengthens governance and risk management capabilities amidst this promising financial outlook.

Story Continues

Our expertly prepared growth report on Judo Capital Holdings implies its future financial outlook may be stronger than recent results. Delve into the full analysis health report here for a deeper understanding of Judo Capital Holdings.ASX:JDO Discounted Cash Flow as at May 2026

Nickel Industries

Overview: Nickel Industries Limited is involved in nickel ore mining and the production of nickel pig iron, cobalt, and nickel matte, with a market cap of A$4.78 billion.

Operations: The company's revenue is derived from three main segments: $223.07 million from nickel ore mining in Indonesia, $235.36 million from HPAL projects in Indonesia and Hong Kong, and $1.43 billion from RKEF projects in Indonesia and Singapore.

Estimated Discount To Fair Value: 49.9%

Nickel Industries is trading at A$1.1, significantly below its estimated future cash flow value of A$2.2, suggesting it is undervalued by more than 20%. The company recently secured a US$450 million loan facility to refinance existing debt and support growth projects, enhancing cash flow flexibility. Despite a recent operational halt at Hengjaya Mine due to an investigation, Nickel Industries is expected to achieve above-average annual profit growth over the next three years.

The analysis detailed in our Nickel Industries growth report hints at robust future financial performance. Click here and access our complete balance sheet health report to understand the dynamics of Nickel Industries.ASX:NIC Discounted Cash Flow as at May 2026

Seize The Opportunity

Click this link to deep-dive into the 37 companies within our Undervalued ASX Stocks Based On Cash Flows screener. Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up. Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

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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 ASX:CMM ASX:JDO and ASX:NIC.

This article was originally published by Simply Wall St.

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