3 UK Stocks Estimated To Be Trading At Discounts Of Up To 40.3%

The United Kingdom’s FTSE 100 and FTSE 250 indices have recently faced challenges, closing lower due to weak trade data from China, which has struggled to recover post-pandemic. In this environment of global economic uncertainty, identifying undervalued stocks can be a strategic move for investors seeking opportunities at potentially discounted prices.

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

Here we highlight a subset of our preferred stocks from the screener.

Overview: Kainos Group plc provides digital technology services across the United Kingdom, Ireland, the Americas, Central Europe, and internationally with a market cap of £1.16 billion.

Operations: The company’s revenue is derived from three main segments: Digital Services (£203.43 million), Workday Products (£76.28 million), and Workday Services (£100.56 million).

Estimated Discount To Fair Value: 12%

Kainos Group’s stock is trading at £9.74, slightly below its estimated fair value of £11.06, suggesting it may be undervalued based on cash flows. Despite a volatile share price and a lower net profit margin compared to last year, the company’s earnings are forecast to grow significantly at 23.6% annually over the next three years, outpacing the UK market average of 14.5%. Recent buybacks and dividend increases reflect strong cash flow management and shareholder returns focus.

LSE:KNOS Discounted Cash Flow as at Nov 2025

Overview: Vistry Group PLC, with a market cap of £2.04 billion, provides housing solutions in the United Kingdom through its subsidiaries.

Operations: The company’s revenue is primarily generated from its Home Builders segment, which encompasses residential and commercial projects, amounting to £3.69 billion.

Estimated Discount To Fair Value: 40.3%

Vistry Group is trading at £6.37, well below its estimated fair value of £10.68, highlighting potential undervaluation based on cash flows. Despite a drop in net profit margin from last year, earnings are projected to grow significantly at 38.2% per year, surpassing the UK market average. Recent strategic moves include a joint venture with Homes England and significant share buybacks, reflecting robust cash flow management and commitment to long-term growth initiatives in housing development.

LSE:VTY Discounted Cash Flow as at Nov 2025

Overview: Zegona Communications plc offers integrated telecommunications services in Spain and has a market cap of £8.92 billion.

Operations: The company’s revenue is primarily generated from its Internet Telephone segment, which accounted for €2.41 billion.

Estimated Discount To Fair Value: 31.2%

Zegona Communications is trading at £11.75, significantly below its estimated fair value of £17.07, suggesting undervaluation based on cash flows. Earnings are expected to grow at 64.43% annually, with revenue growth forecasted to outpace the UK market at 6.2% per year. The company is exploring a potential sale of data centers acquired from Vodafone Spain, valued around €100 million ($117 million), which could impact future cash flow positively if executed strategically.

LSE:ZEG Discounted Cash Flow as at Nov 2025

Access the full spectrum of 53 Undervalued UK Stocks Based On Cash Flows by clicking on this link.

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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 LSE:KNOS LSE:VTY and LSE:ZEG.

This article was originally published by Simply Wall St.

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