For investors, one of the most useful signals is the gap between a stock's intrinsic value and its market price. When a company's intrinsic value — estimated using methods such as discounted cash flow (DCF) analysis or similar approaches — exceeds its trading price, the difference represents the stock's upside potential.

Upside potential helps identify undervalued opportunities. A wide gap suggests the market may be underpricing a stock relative to its fundamentals. Recently, five companies stand out for having especially large upside potential. Below, we highlight them and then show you how to calculate upside potential yourself with the FMP DCF Valuation API.

5 Stocks with High Upside Potential

Helen of Troy Ltd (NASDAQ: HELE)

• DCF Value: $122.90
  
  
• Market Price: $25.44
  
  
• Upside Potential: +383%
  
  

Charter Communications Inc. (NASDAQ: CHTR)

• DCF Value: $795.43
  
  
• Market Price: $273.40
  
  
• Upside Potential: +191%
  
  

Abercrombie & Fitch Co. (NYSE: ANF)

• DCF Value: $126.31
  
  
• Market Price: $85.89
  
  
• Upside Potential: +47%
  
  

PayPal Holdings Inc. (NASDAQ: PYPL)

• DCF Value: $98.87
  
  
• Market Price: $67.30
  
  
• Upside Potential: +47%
  
  

PROG Holdings Inc. (NYSE: PRG)

• DCF Value: $516.35
  
  
• Market Price: $33.40
  
  
• Upside Potential: +1,447%
  
  

These figures illustrate how some stocks — particularly Helen of Troy and PROG Holdings — are trading far below their DCF-derived intrinsic values. While investors should always validate assumptions behind DCF models, these gaps highlight potential opportunities.

Interpreting Upside: Beyond the DCF Number

A big DCF gap isn't automatically a green light. The key is to separate signal (durable mispricing) from artefact (optimistic inputs or one-offs).

For very large gaps (e.g., Helen of Troy, PROG Holdings), start with plausibility checks: normalize cash flows (strip one-time items), test margin reversion, and examine leverage and interest coverage. For moderate gaps (e.g., Abercrombie & Fitch, PayPal), the question is whether quality and growth durability justify the discount—focus on unit economics and multi-year margin trajectory. Capital-intensive names (e.g., Charter) warrant extra scrutiny on capex cycles and maintenance vs. growth spend, since DCFs are highly sensitive to those assumptions.

Make it systematic with FMP. Pair the DCF Valuation API (upside %) with Financial Statements (cash flow, capex, interest), Key Metrics/Ratios (ROIC, margin trends, leverage), and EV/Multiples (P/E, EV/EBITDA) to cross-check reasonableness.

How to Calculate Upside Potential with the FMP API

Instead of running spreadsheets manually, you can use FMP's Discounted Cash Flow (DCF) Valuation API to pull intrinsic value estimates programmatically.

1. Call the DCF Valuation API

Use the following endpoint, replacing the symbol with the company you're analyzing.

Endpoint:

https://financialmodelingprep.com/stable/discounted-cash-flow?symbol=AAPL&apikey=YOUR_API_KEY

Sample Response:

[

{

"symbol": "AAPL",

"date": "2025-02-04",

"dcf": 147.27,

"Stock Price": 231.80

}

]

2. Compute Upside Potential

Apply the formula:

Upside % = (DCF - Stock Price) / Stock Price × 100

For example, if Apple's DCF is $147.27 and its stock price is $231.80:

Upside % = (147.27 - 231.80) / 231.80 × 100 = -36%

This would imply the stock is overvalued relative to DCF.

3. Screen for Opportunities

Loop through multiple tickers, calculate upside for each, and then filter for the top candidates with the largest positive percentages. This gives you a dynamic watchlist of undervalued stocks.

Scaling Your Valuation Workflow

You can experiment with the DCF API on the Free plan, which lets you test the concept on a handful of companies. If you want broader coverage, the Starter plan unlocks access to all U.S.-listed symbols with broader historical data, making it suitable for analyzing more companies or deeper timelines. For professionals running portfolio-wide screens or international comparisons, the Premium plan expands coverage to U.S., U.K., and Canadian exchanges with full historical depth and higher call limits, ensuring your valuation models scale with your research needs.

Scaling Valuation Screens Across Teams

Running the DCF Valuation API on your laptop is useful; piping it into a central data stream is transformational. When DCF outputs are joined with Financial Statements, Key Metrics/Ratios, and Analyst Estimates and pushed to your internal dashboards, PMs, research, and risk work from a single source of truth—updated on schedule, tagged by sector/strategy, and ready for portfolio-level views rather than ad-hoc spreadsheets.

For larger teams and enterprise workflows, FMP's enterprise plan adds governance and speed. Set house assumptions (WACC ranges, terminal growth caps), keep versioned audit trails, and standardize guardrails (e.g., leverage or capex checks) so screens are comparable across teams. PMs get exposure-aware heat maps of upside; risk can backtest upside deciles against realized fundamentals; compliance sees clear lineage with timestamps and sources. In practice, a small analyst script becomes a house signal that scales across books and accelerates decisions.

Putting Valuation Signals to Work

Upside potential is a practical and powerful way to spot undervalued stocks. Helen of Troy, Charter Communications, Abercrombie & Fitch, PayPal, and PROG Holdings currently show some of the biggest gaps between market price and intrinsic value.

By using FMP's DCF Valuation API, you can automate the process of calculating upside potential — turning what used to be a time-consuming valuation exercise into a repeatable, data-driven workflow.

To explore more APIs, data sets, and valuation tools, visit the Financial Modeling Prep.