Global bond yields have been climbing as inflation worries keep central banks cautious on interest rates. That backdrop has drawn more attention to cash flows and valuations, since higher yields can pressure richly priced stocks. The Undervalued Stocks Based On Cash Flows screener focuses on companies where discounted cash flow estimates point to a gap between price and fair value. This article highlights three stocks that currently stand out on that list.

The stocks covered below are just a sample, as the full DCF based screen surfaced 129 more companies with similarly interesting cash flow stories that are not included here. To go straight to the source and identify, filter, and analyze your own high conviction ideas, head into the Undervalued Stocks Based On Cash Flows screener.

On Holding (ONON)

On Holding is a Zurich based sportswear company that designs and sells performance athletic footwear, apparel, and accessories under the On brand, reaching customers through wholesale partners, its own stores, and e commerce. The business currently reports revenue from athletic footwear of about CHF 3.1b, showing how central shoes are to its model, with smaller contributions from apparel and accessories. The stock is valued at around US$12.4b, which places On Holding firmly in large cap territory for investors comparing it with other global consumer brands.

On Holding catches attention because it mixes a fast growing direct to consumer and e commerce model with premium branding in running, outdoor, and all day performance wear. Analysts see scope for strong revenue and earnings growth, yet the stock already trades on a richer P/E than many luxury peers, so this is not a low expectations story. Recent earnings beats, margin focus, and moves into new sports and regions are set against funding that leans entirely on external borrowing and heavy investment needs. For investors who want a growth driven brand with a clear cash flow narrative from the screener, the balance between that potential and the pricing and expansion risks is where the real debate starts.

On Holding’s premium P/E and fast growing direct to consumer story can look hard to reconcile. The DCF valuation analysis for On Holding shows how those expectations stack up against cash flows, including one potential pressure point many investors may be missing.

Build your own cash flow shortlist around On Holding

On Holding and the two other stocks in this list all surfaced from a single Simply Wall St screen, but the real edge comes when you create your own filters. Use our flexible Screener to combine valuation, growth, balance sheet and risk metrics to suit your style, or tap into any of our curated Investing Ideas for ready made starting points.

Atlassian (TEAM)

Atlassian is a Sydney based software company whose tools like Jira, Confluence, Trello and Loom help teams plan work, share knowledge, manage incidents and collaborate through a single system of record. The company currently generates about US$6.6b in revenue from software and programming, reflecting a broad suite that spans project management, IT service management, developer tools and AI assistants such as Rovo. The stock is valued at around US$37.8b, placing Atlassian firmly in large cap territory within global software.

Some investors looking at cash flow driven opportunities may find Atlassian interesting because its core collaboration and workflow products are deeply embedded across technical and non technical teams, while AI tools like Rovo are associated with higher usage and more paid seats. Strong recent earnings momentum, improving margins and a share price that has traded below some fair value estimates have reinforced the case for those who see ongoing cloud and AI adoption as potential tailwinds. At the same time, insider selling, a rich growth profile and reliance on continued cloud migrations and AI monetization mean execution risk is a factor and cash flows may be uneven. The key question is whether Atlassian’s platform strength and AI progress justify staying patient through that volatility.

Atlassian’s cloud and AI story looks powerful, yet the real tension is how that growth stacks up against today’s price. The DCF valuation analysis for Atlassian could reveal where expectations and cash flows quietly part ways.

Unity Software (U)

Unity Software runs a platform that helps developers build, run, and grow games and real time 3D experiences on mobile, PC, consoles, and extended reality devices, and also offers AI tools that support everything from prototyping to monetization. Almost all of its roughly US$2.0b in revenue comes from Computer Graphics related products and services that power both game creation and live operations. The company is valued at about US$18.9b, putting it in the large cap bracket for US software stocks.

Investors looking at Unity Software today are weighing a business that is pushing hard into AI driven creation tools and an expanding subscription base, while still working its way from losses toward sustained profitability. Recent results showed revenue growth with a smaller net loss, guidance that points to an earlier target for GAAP profitability, and growing interest in products like Vector and the upcoming Unity 7. At the same time, heavy investment, competition from rival engines, regulatory scrutiny around data and sizeable insider selling keep execution risk front and center. For readers who want to understand whether the current price fairly reflects that mix of growth and risk, the cash flow story behind Unity from this screener is where the real work begins.

Unity Software’s push into AI tools and real time 3D creation could be masking a very different cash flow profile than many investors assume. Scan the full analysis report for Unity Software and see where the story quietly shifts.

Curious About What You Might Be Missing?

Fresh stock ideas can move fast, and early interest often catches the breakout momentum before it is flying with the crowd. Do not wait while it matters, get in early.

• Spot companies quietly building strength before headlines catch up by scanning the curated 83 resilient stocks with low risk scores that aim to keep drawdowns in check while upside potential is still under the radar for now.
• Ride the push toward smarter factories and warehouses by reviewing the hand picked 37 robotics and automation stocks that could benefit from rising automation demand before valuations start dropping from stretched levels.
• Get ahead of heavy infrastructure spending trends through the focused 37 power grid technology and infrastructure stocks where potential grid upgrade beneficiaries are gathered for you before broader market attention sends volumes flying.

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.