As 2025 draws to a close, the Canadian market has been navigating through a noisy yet promising landscape, with easing inflation and stabilizing labor markets setting a constructive tone for 2026. In this environment, identifying stocks that may be trading below their estimated value can offer investors potential opportunities to benefit from broader equity diversification and improved earnings momentum.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name Current Price Fair Value (Est) Discount (Est) Topicus.com (TSXV:TOI) CA$125.50 CA$225.11 44.2% Major Drilling Group International (TSX:MDI) CA$13.68 CA$22.14 38.2% kneat.com (TSX:KSI) CA$4.76 CA$9.37 49.2% Kinaxis (TSX:KXS) CA$176.88 CA$285.18 38% GURU Organic Energy (TSX:GURU) CA$5.14 CA$8.91 42.3% EQB (TSX:EQB) CA$103.86 CA$184.94 43.8% Endeavour Mining (TSX:EDV) CA$73.13 CA$124.12 41.1% Dexterra Group (TSX:DXT) CA$11.85 CA$22.93 48.3% Black Diamond Group (TSX:BDI) CA$14.84 CA$28.44 47.8% 5N Plus (TSX:VNP) CA$18.60 CA$30.88 39.8%

Click here to see the full list of 25 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.

Colliers International Group

Overview: Colliers International Group Inc. offers commercial real estate services to corporate and institutional clients across various regions including the United States, Canada, Europe, and Asia, with a market cap of CA$10.28 billion.

Operations: The company's revenue is primarily derived from Real Estate Services at $3.20 billion, Engineering at $1.72 billion, and Investment Management at $525.24 million.

Estimated Discount To Fair Value: 19.7%

Colliers International Group is trading at CA$203.13, below its estimated fair value of CA$252.92, suggesting it may be undervalued based on cash flows. Despite lower profit margins this year compared to last, earnings are forecast to grow significantly at 28.7% annually, outpacing the Canadian market's growth rate. Recent executive appointments and plans for strategic acquisitions indicate a focus on expanding their platform and enhancing long-term financial performance despite current challenges with debt coverage by operating cash flow.

Upon reviewing our latest growth report, Colliers International Group's projected financial performance appears quite optimistic. Delve into the full analysis health report here for a deeper understanding of Colliers International Group.TSX:CIGI Discounted Cash Flow as at Dec 2025

Kinaxis

Overview: Kinaxis Inc. offers cloud-based subscription software for supply chain operations across the United States, Europe, Asia, and Canada with a market cap of CA$4.95 billion.

Story Continues

Operations: The company generates revenue of $527.73 million from its supply chain management software and solutions segment.

Estimated Discount To Fair Value: 38%

Kinaxis, trading at CA$176.88, is considerably below its fair value estimate of CA$285.18, reflecting an undervaluation based on cash flows. The company's earnings are expected to grow significantly at 32.8% annually, surpassing the Canadian market's growth rate. Recent innovations like Maestro Agents enhance supply chain efficiency and customer satisfaction. Additionally, a share repurchase program indicates confidence in long-term value creation despite current market conditions and challenges with maintaining high return on equity forecasts.

Our comprehensive growth report raises the possibility that Kinaxis is poised for substantial financial growth. Click here to discover the nuances of Kinaxis with our detailed financial health report.TSX:KXS Discounted Cash Flow as at Dec 2025

Lithium Royalty

Overview: Lithium Royalty Corp. is a lithium-focused royalty company operating in Canada, the United States, Australia, Argentina, Brazil, and South America with a market cap of CA$402.17 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.

Estimated Discount To Fair Value: 16.1%

Lithium Royalty Corp., trading at CA$9.33, is undervalued relative to its fair value estimate of CA$11.12, driven by anticipated revenue growth of 91.1% annually, outpacing the market. Despite limited current revenue of $2M and low forecasted return on equity, profitability is expected within three years. The recent acquisition agreement with Altius Minerals for approximately CA$300 million could unlock further value through strategic synergies and enhanced project economics in Québec's lithium sector.

In light of our recent growth report, it seems possible that Lithium Royalty's financial performance will exceed current levels. Dive into the specifics of Lithium Royalty here with our thorough financial health report.TSX:LIRC Discounted Cash Flow as at Dec 2025

Turning Ideas Into Actions

Unlock our comprehensive list of 25 Undervalued TSX Stocks Based On Cash Flows by clicking here. Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks. Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

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:CIGI TSX:KXS and TSX:LIRC.

This article was originally published by Simply Wall St.

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