--- title: "The 3 Most Undervalued Value Stocks to Buy in July 2024" description: "Three undervalued value stocks to consider for July 2024 are Target (TGT), Nextracker (NXT), and Brinker International (EAT). Target is a discount retailer with strong cash flow and earnings growth po" type: "news" locale: "en" url: "https://longbridge.com/en/news/208694531.md" published_at: "2024-07-12T10:14:00.000Z" --- # The 3 Most Undervalued Value Stocks to Buy in July 2024 > Three undervalued value stocks to consider for July 2024 are Target (TGT), Nextracker (NXT), and Brinker International (EAT). Target is a discount retailer with strong cash flow and earnings growth potential. Nextracker is a leading manufacturer of solar tracking systems with high growth potential. Brinker International is an undervalued value stock worth considering. There are no hard and fast rules for what constitutes a value stock. It’s more about the *feelz*. Well, it is a little bit more than that. You can feel however you want about a company to say it is an undervalued value stock. But if the fundamentals of a business don’t match up, then you’re not investing. You’re gambling. You may as well throw darts at a dartboard. There is a better way, though. Look for stocks that are discounted relative to the market in terms of price, free cash flow (FCF) and earnings growth potential. They will indicate that, although the market is downgrading their value, the company still has the wherewithal to come back strong. What I’ve done is look for stocks that are trading at below that of the **S&P 500’s** price-to-earnings ratio of 29. But they should also have low FCF multiples. That means after paying their bills, the companies still have money available to invest back into the business. I also want them to have high earnings growth potential. This should point to companies with good expansion opportunities. Mind you, you may likely end up looking at some ugly stock price charts. These undervalued value stocks could look like they’ve gone a round or two with Mike Tyson in his prime. But don’t be scared off. Hold your nose and dive into the three deeply discounted stocks below. ## Target (TGT) Source: Robert Gregory Griffeth / Shutterstock.com Discount retailer **Target** (NYSE:**TGT**) is the country’s sixth-largest retailer. Not being atop the heap means those above it apply considerable competitive pressure. After rebounding from missteps a decade ago, the mass merchandiser reinvested in its business to create an efficient operation that resonated with consumers. Especially its digital initiatives that came to the fore during the pandemic, Target proved it can go toe-to-toe with **Walmart** (NYSE:**WMT**) and **Amazon** (NASDAQ:**AMZN**). Its biggest drawback, though, is needing to constantly drive cost efficiencies, whether it is in its stores, fulfillment or supply chain. Because it doesn’t stand out in terms of scale, price or product differentiation, Target must continuously improve its cost structure. Fortunately, the retailer is a cash-generating machine. Target produced $3.8 billion in FCF last year and has grown FCF to $4.6 billion over the trailing 12-month period. TGT stock trades at 14 times FCF and goes for 16 times earnings. The stock is flat in 2024, but with Wall Street expecting the retailer to grow earnings at 18% annually, the retailer is poised to grow and enjoy a multiple expansion. Target stock is an undervalued value stock that should be on your buy list. ## Nextracker (NXT) Source: Shutterstock Spun off from electronics manufacturing specialist **Flex** (NASDAQ:**FLEX**) in 2023, **Nextracker** (NASDAQ:**NXT**) hasn’t fared too badly in its bout with Tyson. The stock is up 65% since the separation but is only 9.3% higher this year. As it still trades for some cheap valuations, it is worth considering buying this undervalued value stock. Nextracker is the world’s largest manufacturer of intelligent tracking systems based on gigawatts (GW) shipped in the U.S. and globally. Solar panels produce 25% to 35% more energy when they follow the sun’s path across the sky than stationary panels. Nextracker provides these solar trackers at utility-scale. Unlike residential solar systems, utility-scale projects aren’t affected the same by high interest rates, though they are not immune. Yet that is why fiscal fourth-quarter revenue surged 42% from last year and profits exploded from 2 cents per share to $1.51 per share. Despite the powerful performance, Nextracker stock remains undervalued. It trades at 15 times earnings and 16x FCF. Yet with analysts anticipating the solar tracker stock expanding earnings at a breathtaking 40% annually for the next five years, this is an undervalued value stock to buy today. ## Brinker International (EAT) Source: James R. Martin/ShutterStock.com On the surface, **Brinker International** (NYSE:**EAT**) doesn’t seem to fit the undervalued value stock mold. Shares are up 51% year-to-date and are 71% higher over the past year. Those are growth stock numbers and wildly so, since Brinker is a restaurant chain that owns Chili’s and Maggiano’s Little Italy. And yet it does offer investors significant value still. It is an example of a company whose performance has outpaced its valuation, and that bodes well for investors. Buying now lets you enjoy the multiple expansion to come. Brinker International is benefiting from the love affair with Mexican food. Its Chili’s chain is the moneymaker for the restaurateur, as its Tex-Mex flavors are capturing diners wallets as well as their stomachs. Fiscal third-quarter sales for the brand rose 3.8% to $988 million, representing 89% of total revenue. That was achieved by Brinker offering a combination of menu innovation and value. It resulted in the restaurant operator growing sales and traffic ahead of the industry. While trading at 19x earnings, it also goes for a small fraction of its sales and for less than its long-term earnings growth rate of 20%. It does trade at a slightly elevated price-to-free cash flow of 19, but as a fast-growing chain, Brinker International still offers investors great value and is an undervalued vale stock. *On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.* *On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.* Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets. 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