Central bank expectations have eased after softer US employment data, and that has shifted attention back to company fundamentals. When rates feel less unpredictable, investors often care more about what a business earns and the cash it keeps. That is where Undervalued Stocks Based On Cash Flows come in. This article highlights three stocks from the screener that combine discounted valuations with solid cash flow potential.
The three stocks covered below are just a sample, and the full screen surfaced 787 more companies with cash flow stories and valuation gaps that are not covered here. To go straight to the source and identify, compare, and analyze the highest conviction ideas, head into the Undervalued Stocks Based On Cash Flows screener.
Unity Software (U)
Overview: Unity Software runs a global platform that helps developers create, run, and grow real time 2D and 3D games and interactive experiences across mobile, PC, console, and extended reality devices, and also supports industries like automotive, healthcare, and architecture with similar tools and services.
Operations: Unity generates about US$2.0b in revenue primarily from its Computer Graphics segment, which covers its Create and Grow tools and related services across regions including the United States, Greater China, EMEA, and the broader Asia Pacific.
Market Cap: US$18.9b
Unity Software may be worth a closer look for those focused on cash flow potential tied to business adoption. The company is still reporting losses, and analysts expect earnings and margins to improve as the higher margin subscription Create business and the Vector AI ad platform scale, supported by the recent sunset of lower quality ad assets such as the ironSource network. Analyst forecasts for higher earnings and a possible move to GAAP profitability as soon as Q3 2026 are weighed against risks such as heavy AI investment, customer concentration, and intense competition. For investors comfortable with volatility, the combination of broad creator reach, expanding enterprise use cases, and analyst conviction may be an important set of factors to consider.
Unity Software’s push toward higher margin tools and its Vector AI ad platform has many investors focused on earnings potential, but the real story sits inside the analyst forecasts for Unity Software that could shift how you see the risk reward balance
Build your own cash flow and growth shortlist
Unity Software and the two other stocks in this article all came out of the same Simply Wall St screener, but your edge comes from tuning the filters to your own approach. Use our flexible Screener to combine valuation, future growth, balance sheet and risk checks into your own watchlist, or tap into any of our curated Investing Ideas for ready made starting points.
DLocal (DLO)
Overview: DLocal is a Uruguay based payments company that helps global merchants accept and send money in emerging markets, connecting them to local cards, bank transfers, cash payments, and hundreds of alternative payment methods through a single platform.
Operations: DLocal generates about US$1.2b in revenue from payment processing, with key markets across Brazil, Mexico, Argentina and the rest of Latin America, plus additional income from other regions.
Market Cap: US$4.2b
DLocal may appeal to investors who want exposure to digital payments in emerging markets without owning a traditional bank. The company runs a capital light model that has supported its returns on invested capital and earnings, while its reach across more than 40 countries gives global merchants a single connection into local payment systems. At the same time, risks such as potential pressure on the fees it earns per transaction, regulatory shifts, and reliance on large merchant customers could affect returns if they move against expectations. With a discounted cash flow value described as being above the current share price and with noted interest from large banks and index providers, this is a stock where deeper research could reshape views on its balance of risks and potential rewards.
DLocal’s capital light model and reach across more than 40 countries could be masking a different story. The real swing factor sits inside the analysis report for DLocal and represents one nuance many investors may be missing.
Fortuna Mining (TSX:FVI)
Overview: Fortuna Mining is a Vancouver based precious and base metals producer that owns and operates gold mines at Lindero in Argentina and Séguéla in Côte d’Ivoire, along with the Caylloma mine in Peru that produces silver, lead, and zinc.
Operations: Fortuna Mining generates about US$680 million in revenue from its Sango segment, US$357 million from Mansfield, and US$145 million from Bateas, with key contributions from Côte d’Ivoire, Argentina, and Peru.
Market Cap: CA$4.3b
Fortuna Mining sits at the intersection of strong recent performance and large future projects that could reshape its cash flow profile. Earnings growth has been very large, margins and return on equity are high, and analysts currently have a consensus target of CA$17.82 compared to the current CA$14.52 share price, alongside a higher Simply Wall St fair value estimate. This may be of particular interest to investors who focus on cash flow, given the combination of record free cash generation, net cash of about $435 million, and large development plans at Séguéla and Diamba Sud. However, these projects require substantial spending and involve political, permitting, and cost risks that could affect outcomes if they do not proceed as planned.
Fortuna Mining’s cash rich balance sheet and record free cash generation could be setting up a very different future than the share price implies. The full picture hides in the analysis report for Fortuna Mining and in one project twist that could change everything.
Seeking Alternatives Before The Crowd Moves
Fresh stock ideas can move quickly as momentum builds, cash flows shift, and under the radar stories risk getting caught once prices start rising. Consider these while it matters and before larger interest develops.
- Spot companies quietly building momentum in quality, balance sheet strength, and earnings resilience through the curated list of solid balance sheet and fundamentals (48 results) before they stop looking inexpensive.
- Look for income potential from businesses with higher yields and sturdy cash flows using the focused 8 dividend fortresses before payout stories are fully reflected in prices.
- Track developments in AI infrastructure with carefully filtered 56 AI infrastructure stocks and review opportunities before more capital follows the same theme.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com