Global markets are wrestling with higher energy costs, uneven growth signals, and central banks that are hesitant to move too quickly on interest rates. In this kind of mixed backdrop, investors often look for companies where the cash being generated by the business is not fully reflected in the share price. The Undervalued Stocks Based On Cash Flows screener focuses exactly on that and highlights stocks that SWS DCF valuation suggests are trading below their fair value. In this article, you will see three of the best stocks from this screener that may merit a closer look for value oriented portfolios.

On Holding (ONON)

Overview: On Holding is a Zurich based sportswear company that designs and sells premium athletic footwear, apparel, and accessories for running, outdoor, training, tennis, and everyday wear, reaching customers through both wholesale partners and its own stores and e commerce channels worldwide.

Operations: The company currently generates essentially all of its CHF3.1b revenue from athletic footwear, with Asia Pacific contributing CHF564.5m.

Market Cap: CHF11.9b

On Holding provides exposure to a premium sports brand with a direct to consumer and e commerce engine that is described as supporting higher margins and tighter control over pricing and customer data. According to Simply Wall St, it trades below their cash flow value estimates. The company is expanding globally and across categories, which introduces execution risks, high marketing spend, and reliance on more affluent consumers who could pull back if conditions change. Earnings quality is described as high, forecasts referenced in the article indicate faster revenue and earnings growth than the broader US market, and analyst targets are reported to sit above the current share price. The key question for investors is whether its premium pricing power and global brand momentum can adequately balance funding and expansion risks over time.

On Holding’s premium pricing and global rollout are getting attention, but the real tension is whether growth justifies today’s valuation. Put the story in context with analyst expectations through the analyst forecasts for On Holding

Rocket Lab (RKLB)

Overview: Rocket Lab is a Long Beach based space company that launches small and medium class rockets, designs and manufactures satellites and spacecraft components, and provides end to end mission services for commercial, government, and defense customers around the world.

Operations: Rocket Lab generates most of its revenue from Space Systems at about US$452.5m, with Launch Services contributing roughly US$227.1m.

Market Cap: US$38.2b

Rocket Lab gives you exposure to the commercial space sector, combining launch services with satellite manufacturing and, through the planned Iridium Communications acquisition, a global communications network that could support recurring revenue. Simply Wall St’s DCF suggests the stock trades below estimated fair value, but the company is still unprofitable and has relied on shareholder dilution and higher risk borrowing. Recent U.S. Air Force and NASA contracts, plus missions such as Victus Haze, illustrate traction with government customers. The Neutron rocket and the Iridium deal introduce both potential for greater scale and execution risk. For investors, a key consideration is whether this push toward a vertically integrated space platform can justify the current valuation before ongoing losses become a significant drag.

Rocket Lab’s push to a vertically integrated space platform, backed by government contracts and the Iridium acquisition, is only half the story. The real twist sits inside the 2 key rewards and 3 important warning signs (1 is major!)

Palantir Technologies (PLTR)

Overview: Palantir Technologies builds software platforms that help government and commercial customers pull together huge amounts of data, understand it, and act on it, particularly in defense, intelligence, and complex industrial settings. Its tools support everything from counterterrorism and battlefield decision making to day to day data driven operations in businesses using Gotham, Foundry, Apollo, and its Artificial Intelligence Platform.

Operations: Palantir generates about US$2.8b from government contracts and roughly US$2.5b from commercial customers, with the United States contributing around US$4.0b of its revenue alongside the United Kingdom and other international markets.

Market Cap: US$294.7b

Palantir attracts attention because it combines very strong profitability metrics, including a 43.7% net margin and high current and projected ROE, with an AI heavy product stack that governments and large enterprises embed deeply into critical operations. The stock screens as undervalued on Simply Wall St’s cash flow model, even though headline multiples like P/E remain high. This creates tension between premium pricing and what some investors view as underappreciated cash generation. At the same time, Palantir relies entirely on higher risk external borrowing for liabilities and carries governance questions around a board that has not added new directors recently. For investors, the real question is whether its AI platforms and long duration government work can keep justifying that premium while those risks stay contained.

Palantir’s high margins and AI heavy platforms have many investors focused on the upside, but the bigger story is how those cash flows, contracts, and governance fit together in the full narrative for Palantir Technologies

The three stocks covered here are only a starting point, and the full Undervalued Stocks Based On Cash Flows tool on Simply Wall St currently flags 142 more companies where the cash flow story and valuation gap may be just as compelling as those already discussed, all grouped in the Undervalued Stocks Based On Cash Flows screener. Use Simply Wall St to identify and analyze the specific cash flow catalysts, balance sheet traits, and valuation narratives that matter most to you so you can focus on the highest conviction ideas in minutes.

Take Control of Your Investment Journey

If On Holding or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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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.