The 10 Most Undervalued Quality Companies of 2026 according to the reverse DCF!
Each year I run a reverse DCF analysis on around 250 companies. The goal of a reverse DCF is to see how much free cash flow growth the market is pricing in. I compare these to the 10- 5- and 3- Year FCF CAGR to see if investors are expecting the company to do worse or better than the previous years.
There are 3 rules:
1. The FCF should be positive in at least 8 of the last 10 years.
2. The FCF should be positive in the last year.
3. The standard deviation of the FCF should be less than 40%.
According to this analysis the 10 most undervalued companies of 2026 are:
$DTE: Deutsche Telekom
$VEEV: Veeva Systems
$KSNL: Kinsale Capital
$CRM: Salesforce
$CDI: Christian Dior
$PAYC: Paycom
$ADBE: Adobe
$PANW: Palo Alto
$CPRT: Copart
$MA: Mastercard
Do you own any of these undervalued companies?
If you want to know more, please read the thread 🧵