Undervalued Stocks in the US: August 2025

The US stock market is near record highs, and investors are monitoring interest rate expectations and retail earnings reports. Ten stocks identified as potentially undervalued based on cash flows include UMB Financial, Udemy, Royal Gold, and Lyft, with estimated discounts ranging from 47.4% to 49.4%. Burlington Stores and Elastic are highlighted, with Burlington trading at a 30.2% discount to its estimated fair value and Elastic generating revenue primarily from its Software & Programming segment.

The US stock market is near record highs, driven by optimism over potential interest rate cuts by the Federal Reserve. Futures for the S&P 500 and Nasdaq each ticked up 0.2% before the opening bell, while the Dow Jones Industrial Average futures rose 0.3%. This rally is partly attributed to relief over an extended truce in President Donald Trump’s trade war with China and new optimism about falling borrowing costs [1].

Lower interest rates would boost investment prices and the economy by making it cheaper for US households and businesses to borrow. President Trump has been calling for rate cuts to help the economy, often criticizing the Fed’s chair. The Fed is expected to receive one more report on inflation and another on the US job market before its next meeting on September 17. The recent jobs report was weaker than expected, adding to the uncertainty [1].

In addition to interest rate expectations, investors are closely monitoring retail earnings reports. Ten stocks identified as potentially undervalued based on cash flows include UMB Financial, Udemy, Royal Gold, and Lyft, with estimated discounts ranging from 47.4% to 49.4%. Burlington Stores and Elastic are highlighted, with Burlington trading at a 30.2% discount to its estimated fair value and Elastic generating revenue primarily from its Software & Programming segment [2].

Lyft Inc. is one of the stocks experiencing significant growth. The company's stock trading up by 8.55% reflects bullish sentiment fueled by positive earnings and strategic partnerships. Lyft formed a strategic partnership with Baidu to deploy autonomous vehicles in Europe and reported record financials for Q2 2025, with an 11% revenue increase to $1.59B [2].

The global market is also showing resilience. Tokyo's benchmark Nikkei 225 added to its record set a day earlier, finishing 1.3% higher at 43,274.67. Hong Kong's Hang Seng surged 2.6% to 25,613.67, while the Shanghai Composite index added 0.5% to 3,683.46. In Japan, relief over the Trump administration's confirmation that its exports will face a flat 15% U.S. import duty has driven strong buying of computer chip-related companies and other exporters [1].

In energy trading, U.S. benchmark crude oil gave back 52 cents to $62.65 per barrel, while Brent crude fell 44 cents to $65.68 per barrel. The U.S. dollar dipped to 147.51 Japanese yen from 147.84 yen, and the euro climbed to $1.1713 from $1.1677 [1].

References:
[1] https://www.barchart.com/story/news/34100851/world-shares-charge-higher-after-us-stocks-rally-to-records-on-hopes-for-interest-rate-cuts
[2] https://stockstotrade.com/news/lyftinc-lyft-news-2025_08_16-2/