3 ASX Stocks That May Be Priced Below Their Estimated Value In May 2025

Investors often seek opportunities where the market’s pricing of a stock lags behind its intrinsic value—a gap that, if closed, can deliver outsized returns. As of May 2025, three ASX-listed companies—Domino's Pizza Enterprises (ASX:DMP), Sandfire Resources (ASX:SFR), and Integral Diagnostics (ASX:IDX)—appear to trade at significant discounts to their estimated fair values, supported by robust earnings growth and undervalued catalysts. Below is an analysis of why these stocks may present compelling value plays.

1. Domino's Pizza Enterprises (ASX:DMP): A 49.8% Discount to a Global Franchise Leader

Current Price: A$25.85 (May 2025)
Estimated Fair Value: A$51.48
Discount: 49.8% below intrinsic value

Domino's Pizza, a global pizza franchise giant, trades at nearly half its estimated fair value. While the company reported a net loss of A$22.17 million in H1 FY2025, its earnings growth projection of 43.3% annually outpaces the Australian market’s 11.7% average. This surge is driven by its international expansion and the rapid growth of its delivery platform, Kraken, which now has 67 million contracted accounts (targeting 100 million by 2027).

Growth Catalysts:
- Octopus Energy: The company’s stake in the UK’s leading green energy provider added 674,000 net customers in early 2025, signaling synergies between its restaurant and energy divisions.
- Margin Recovery: Analysts project a rebound in profit margins as the Kraken platform scales, reducing operational costs per user.

Risks:
- High debt levels and recent net losses raise concerns about liquidity.
- The franchise model’s reliance on third-party operators introduces execution risks.

2. Sandfire Resources (ASX:SFR): A 44% Discount to a Copper Growth Story

Current Price: A$9.97 (May 2025)
Estimated Fair Value: A$17.82
Discount: 44% below intrinsic value

Sandfire Resources, a copper miner with projects in Botswana and Australia, trades at a steep discount despite strong fundamentals. The company turned profitable in H1 2025, reporting a net income of US$51.5 million, and projects 32.7% annual earnings growth through 2025. Its flagship Motheo Copper Project in Botswana is on track to produce 190,000–210,000 tonnes of copper annually, capitalizing on rising global demand for the metal amid the energy transition.

Growth Catalysts:
- Copper Demand: Global copper consumption is projected to grow by 4% annually through 2030, driven by EV adoption and renewable infrastructure.
- Cost Efficiency: Sandfire’s low-cost operations (US$1.23/lb cash costs at Motheo) provide a margin advantage over higher-cost competitors.

Risks:
- Low Return on Equity: Forecasts predict a ROE of just 12.9%, raising questions about capital allocation.
- Geopolitical Risks: Operations in Botswana and Australia face regulatory and labor challenges.

3. Integral Diagnostics (ASX:IDX): A 41% Discount to Australia's Diagnostic Leader

Current Price: A$2.42 (May 2025)
Estimated Fair Value: A$4.10
Discount: 41% below intrinsic value

Integral Diagnostics, Australia’s largest diagnostic imaging provider, trades at a 41% discount to its estimated value. Despite one-off expenses depressing recent earnings, the company’s 40.6% annual earnings growth projection is among the highest in the ASX healthcare sector. With a network of 225 centers across Australia and New Zealand, Integral benefits from rising demand for medical imaging due to an aging population and underpenetrated rural markets.

Growth Catalysts:
- M&A Potential: Rumors of private equity interest suggest a possible bid to consolidate the fragmented diagnostics market.
- Government Contracts: Long-term agreements with Medicare and private insurers provide stable revenue streams.

Risks:
- Margin Pressures: Declining profit margins due to rising labor costs and equipment investments.
- Regulatory Risks: New billing rules or reimbursement cuts could impact profitability.

Conclusion: A High-Reward, High-Risk Value Play

These three stocks—DMP, SFR, and IDX—present a compelling case for investors seeking undervalued opportunities. Domino's Pizza’s global scale and margin recovery potential, Sandfire’s exposure to the copper boom, and Integral Diagnostics’ sector dominance and M&A prospects all justify their discounts.

However, risks are significant. Domino's faces debt management challenges, Sandfire’s ROE concerns could limit returns, and Integral’s margin pressures demand close monitoring. Investors should consider these stocks as long-term bets, with intrinsic value closing only if earnings growth materializes and risks are mitigated.

For context, DMP’s fair value is 103% higher than its current price, while SFR’s is 79% higher and IDX’s is 69% higher. These gaps, supported by robust growth forecasts, suggest that patient investors may be rewarded—provided the companies execute on their strategies.

In a market where ASX200 resilience is constrained by sector volatility, these three undervalued stocks offer a chance to capitalize on overlooked opportunities. But as with all value plays, due diligence and a long-term horizon are essential.