As the Canadian market navigates a landscape filled with geopolitical tensions and policy shifts, fundamentals continue to steer the course, with low energy prices and moderating inflation anchoring stability. In this environment of broadening earnings and solid growth, identifying stocks that may be trading below their estimated value involves focusing on these enduring economic strengths rather than headline volatility.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name Current Price Fair Value (Est) Discount (Est) Major Drilling Group International (TSX:MDI) CA$14.39 CA$22.10 34.9% Lithium Royalty (TSX:LIRC) CA$10.53 CA$18.47 43% Kits Eyecare (TSX:KITS) CA$21.60 CA$38.67 44.1% G Mining Ventures (TSX:GMIN) CA$47.81 CA$69.27 31% First Majestic Silver (TSX:AG) CA$31.06 CA$55.53 44.1% Exchange Income (TSX:EIF) CA$93.38 CA$164.06 43.1% EQB (TSX:EQB) CA$106.84 CA$187.33 43% CareRx (TSX:CRRX) CA$3.91 CA$7.74 49.5% Almonty Industries (TSX:AII) CA$13.05 CA$22.10 41% Ag Growth International (TSX:AFN) CA$29.56 CA$49.70 40.5%

Click here to see the full list of 22 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

Equinox Gold

Overview: Equinox Gold Corp. is involved in the acquisition, exploration, development, and operation of mineral properties across the Americas and has a market cap of CA$16.12 billion.

Operations: The company's revenue segments include Mesquite with $272.36 million, Los Filos generating $261.15 million, Greenstone contributing $639.62 million, and Castle Mountain at $35.71 million.

Estimated Discount To Fair Value: 30.3%

Equinox Gold is trading at 30.3% below its estimated fair value, with a current price of CA$21.63 compared to a future cash flow value estimate of CA$31.05. Despite significant insider selling recently and past shareholder dilution, the company's earnings are forecast to grow significantly at 49.4% annually over the next three years, outpacing the Canadian market's expected growth rate of 12.2%. Recent production results align with guidance, supporting potential revenue increases.

Insights from our recent growth report point to a promising forecast for Equinox Gold's business outlook. Get an in-depth perspective on Equinox Gold's balance sheet by reading our health report here.TSX:EQX Discounted Cash Flow as at Jan 2026

Lithium Royalty

Overview: Lithium Royalty Corp. is a lithium-focused royalty company with operations in Canada, the United States, Australia, Argentina, Brazil, and South America and has a market cap of CA$571.16 million.

Operations: The company generates revenue of $1.79 million from the acquisition and management of royalty rights and working interests across its operational regions.

Story Continues

Estimated Discount To Fair Value: 43%

Lithium Royalty Corp. is trading at CA$10.53, significantly below its estimated fair value of CA$18.47, suggesting it's undervalued based on cash flows despite a current net loss of US$4.13 million for the first nine months of 2025. The company's revenue is expected to grow rapidly at 92.7% annually and it could become profitable within three years, bolstered by strategic expansions like the Adina project in Québec and an impending acquisition by Altius Minerals Corporation for approximately CA$300 million.

Our growth report here indicates Lithium Royalty may be poised for an improving outlook. Delve into the full analysis health report here for a deeper understanding of Lithium Royalty.TSX:LIRC Discounted Cash Flow as at Jan 2026

Pan American Silver

Overview: Pan American Silver Corp. operates in the exploration, development, extraction, processing, refining, and reclamation of mines across Canada and several Latin American countries with a market cap of CA$33.15 billion.

Operations: The company's revenue segments include operations in Peru - Huaron ($193.30 million), Canada - Timmins ($331.30 million), Mexico - Dolores ($206.40 million), Peru - Shahuindo ($429.60 million), Brazil - Jacobina ($597.50 million), Chile - El Peñon ($501 million), Mexico - La Colorada ($243.10 million), Bolivia - SAN Vicente ($117.60 million), and Argentina - Cerro Moro ($321.80 million).

Estimated Discount To Fair Value: 29.4%

Pan American Silver, trading at CA$80.99, is highly undervalued based on discounted cash flows with an estimated value of CA$114.77. The company's earnings are projected to grow significantly at 44.7% annually, outpacing the Canadian market's growth rate of 12.2%. However, recent insider selling and past shareholder dilution may concern investors despite robust exploration results across multiple mines and increased silver production guidance for 2025 to between 22-22.5 million ounces.

The growth report we've compiled suggests that Pan American Silver's future prospects could be on the up. Click here to discover the nuances of Pan American Silver with our detailed financial health report.TSX:PAAS Discounted Cash Flow as at Jan 2026

Where To Now?

Embark on your investment journey to our 22 Undervalued TSX Stocks Based On Cash Flows selection 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. Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.

Curious About Other Options?

Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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:EQX TSX:LIRC and TSX:PAAS.

This article was originally published by Simply Wall St.

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