As 2025 comes to a close, the Canadian market is navigating through a period of noisy yet encouraging data, with expectations for a constructive outlook in 2026. In this environment of moderating wage pressures and easing inflation, investors may find opportunities in undervalued stocks on the TSX that are trading significantly below their intrinsic value.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name Current Price Fair Value (Est) Discount (Est) Topicus.com (TSXV:TOI) CA$126.35 CA$224.42 43.7% Major Drilling Group International (TSX:MDI) CA$13.24 CA$22.09 40.1% kneat.com (TSX:KSI) CA$4.82 CA$9.34 48.4% Kinaxis (TSX:KXS) CA$174.92 CA$283.60 38.3% GURU Organic Energy (TSX:GURU) CA$4.91 CA$8.91 44.9% EQB (TSX:EQB) CA$103.45 CA$184.86 44% Endeavour Mining (TSX:EDV) CA$73.08 CA$123.40 40.8% Dexterra Group (TSX:DXT) CA$12.00 CA$22.88 47.5% Black Diamond Group (TSX:BDI) CA$15.09 CA$28.49 47% 5N Plus (TSX:VNP) CA$18.05 CA$30.79 41.4%

Click here to see the full list of 25 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Dexterra Group

Overview: Dexterra Group Inc. provides support services for infrastructure creation, management, and operation in Canada with a market cap of CA$737.87 million.

Operations: Dexterra Group Inc.'s revenue is primarily derived from Support Services, contributing CA$844.20 million, and Asset Based Services, which adds CA$173.86 million.

Estimated Discount To Fair Value: 47.5%

Dexterra Group is trading at a significant discount to its estimated fair value of CA$22.88, with current prices around CA$12. Recent earnings reports show robust financial health, with third-quarter net income rising to CA$12.88 million from CA$7.66 million the previous year. Despite high debt levels, Dexterra's expected annual profit growth of 22.5% surpasses the Canadian market average, indicating strong cash flow potential and positioning it as an undervalued investment opportunity in Canada.

Our earnings growth report unveils the potential for significant increases in Dexterra Group's future results. Get an in-depth perspective on Dexterra Group's balance sheet by reading our health report here.TSX:DXT Discounted Cash Flow as at Dec 2025

Major Drilling Group International

Overview: Major Drilling Group International Inc. offers contract drilling services to mining and mineral exploration companies across various regions, including the United States, Canada, South and Central America, Australasia, and Africa, with a market capitalization of approximately CA$1.12 billion.

Operations: The company generates CA$819.03 million in revenue from its drilling services provided to mining and mineral exploration firms across multiple continents.

Story Continues

Estimated Discount To Fair Value: 40.1%

Major Drilling Group International is trading at CA$13.24, significantly below its estimated fair value of CA$22.09, highlighting its undervaluation potential based on cash flows. Despite a decline in net profit margin from 6.1% to 1.9%, the company's earnings are forecast to grow significantly, outpacing the Canadian market average. Recent insider selling and lower quarterly net income raise some concerns, yet ongoing contracts like Zacatecas Silver's drilling project underscore operational momentum and revenue growth prospects.

Our expertly prepared growth report on Major Drilling Group International implies its future financial outlook may be stronger than recent results. Navigate through the intricacies of Major Drilling Group International with our comprehensive financial health report here.TSX:MDI Discounted Cash Flow as at Dec 2025

5N Plus

Overview: 5N Plus Inc. is a company that produces and sells specialty semiconductors and performance materials across the Americas, Europe, Asia, and internationally, with a market cap of CA$1.66 billion.

Operations: The company's revenue is derived from two main segments: Specialty Semiconductors, contributing $261.09 million, and Performance Materials, accounting for $98.86 million.

Estimated Discount To Fair Value: 41.4%

5N Plus is trading at CA$18.05, well below its estimated fair value of CA$30.79, suggesting it is undervalued based on cash flows. The company's earnings grew by a very large amount over the past year and are forecast to grow faster than the Canadian market. Recent additions to major indices and a robust balance sheet position 5N Plus for potential strategic acquisitions, enhancing its growth prospects despite slower expected revenue growth compared to earnings.

Our growth report here indicates 5N Plus may be poised for an improving outlook. Click here to discover the nuances of 5N Plus with our detailed financial health report.TSX:VNP Discounted Cash Flow as at Dec 2025

Key Takeaways

Discover the full array of 25 Undervalued TSX Stocks Based On Cash Flows right here. Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive. Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TSX:DXT TSX:MDI and TSX:VNP.

This article was originally published by Simply Wall St.

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