Finding a cheap ASX share is not simply a matter of looking for the biggest decline.
For me, the best opportunities are when the valuation looks modest compared with what a business could earn over the next few years.
Here are three ASX shares I think fit that description today.
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Zip Co Ltd (ASX: ZIP)
Zip is probably the most obvious value opportunity of the three.
The buy now, pay later company's shares have fallen heavily and were recently trading around $1.99, well below their 52-week high of $4.94.
What I think makes that decline interesting is the earnings outlook.
Consensus forecasts point to earnings per share (EPS) of 15 cents in FY27, rising to 18 cents in FY28 and 22.4 cents in FY29.
At $1.99, that puts Zip shares on a PE ratio of roughly 13.3 times forecast FY27 earnings. If the company reaches the FY29 estimate, the multiple falls to just under 9 times.
That looks inexpensive for a business expected to grow earnings meaningfully over the same period.
Zip still needs to deliver on those forecasts, and I would expect plenty of volatility along the way. But I think the current valuation leaves enough upside to make the shares worth buying.
CSL Ltd (ASX: CSL)
CSL shares have already staged an impressive recovery. The healthcare giant is now trading around $177.67, almost double its 52-week low of $90.
While this means it isn't as cheap as it was, I still see a lot of value in this ASX share.
Consensus forecasts point to EPS of $8.98 in FY27, rising to $9.47 in FY28 and $10.07 in FY29.
At today's price, that puts CSL on a forward PE ratio of around 20 times FY27 earnings, falling to less than 18 times FY29 earnings if those forecasts are achieved.
For a global healthcare business with strong positions in plasma therapies, vaccines, and specialised medicines, I think that valuation still looks attractive.
The sharp rebound from the lows means some of the recovery has already been recognised by the market. But with earnings expected to keep growing, I still think CSL offers enough value at current levels to remain on my buy list.
Goodman Group (ASX: GMG)
Goodman is my third pick. The shares were recently trading around $26.49, down from a 52-week high of $34.78.
What I like here is that the share price decline has happened despite its earnings growth outlook remaining positive.
Goodman generated EPS of 129.9 cents in FY26. Consensus forecasts point to 142 cents in FY27 and 151 cents in FY28.
That leaves the shares trading on around 18.6 times forecast FY27 earnings.
I think that looks reasonable given Goodman's growth opportunities, particularly its increasing exposure to data centres.
The enormous investment being made in AI and cloud infrastructure is creating demand for sites with access to land, power, and major population centres. Goodman has positioned itself to participate in that development pipeline.
Foolish takeaway
Cheap can mean different things in the share market, and I think that is what makes these three ASX shares worth another look.
None of them needs everything to go perfectly for today's prices to make sense to me. If earnings broadly move in the direction analysts expect, I think there is still room for patient investors to do well.
