These 3 Canadian Stocks Are Undervalued and Built to Outperform

These Canadian stocks are trading below what they’re worth and could reward investors willing to wait.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published June 20, 2025 11:45 am EDT

Ever feel like some popular growth stocks just get all the love and attention while others get left in the corner? That’s exactly where the opportunity lies. Right now, even with the TSX Composite benchmark hitting all-time highs, there are many great Canadian companies trading for less than they’re worth, especially considering their solid businesses with strong financials and long-term outlooks.

Let’s dig into three top Canadian stocks that are flying under the radar but have the potential to outperform the broader market by a wide margin over the long term.

OpenText stock

A top Canadian growth stock you can consider now is OpenText (TSX: OTEX), a tech stock that seems to be flying well below the radar despite being one of the largest enterprise software players in Canada.

After sliding by 5% so far in 2025, OTEX stock is currently trading at $38.72 per share with a market cap of about $10 billion. OpenText pays a quarterly dividend, with a healthy annualized yield of 3.7%.

In the March 2025 quarter, OpenText’s total revenues slipped 13.3% YoY (year over year) to US$1.25 billion. Nevertheless, its cloud segment revenue continued rising for the 17th straight quarter. This helped the company deliver US$395 million in adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) and a solid margin of 31.5%.

OpenText is also pushing forward with its Aviator AI (artificial intelligence) platform and expanding its business optimization plan, which could improve its margins and drive its share price higher.

Topicus.com stock

The second stock on the list is Topicus.com (TSXV: TOI), a software firm that has been delivering some impressive growth that long-term investors shouldn’t ignore. Topicus builds and manages vertical market software platforms, mainly across Europe, serving sectors like healthcare, finance, and education.

TOI stock has jumped nearly 49% over the last year and is currently trading at $167 per share with a market cap of about $13.9 billion.

In the first quarter of 2025, the company’s revenue rose 16% YoY (year over year) to €355.6 million, with its adjusted quarterly earnings climbing 36% from a year ago to €0.30 per share. Even with some sequential softness, its recurring revenue base and acquisition-led growth model continued to drive solid momentum.

More interestingly, Topicus reported a 21% YoY jump in free cash flow available to shareholders and invested €168 million to take a nearly 10% stake in Poland’s Asseco. Such moves clearly suggest Topicus is playing the long game, which is exactly what long-term investors want to see.

Lightspeed stock

Another top Canadian growth stock you can consider for the long term is Lightspeed Commerce (TSX: LSPD), a tech stock that seems overlooked even as it keeps making progress quarter after quarter.

Lightspeed, which provides point-of-sale and payments software for retail and hospitality businesses, recently posted solid results for its fiscal year 2025 (ended in March). The company’s revenue grew 18% YoY to US$1.08 billion for the year and saw adjusted EBITDA jump to US$53.7 million from just US$1.3 million the year before. That’s a huge improvement in profitability.

Despite that, the stock is still down more than 30% in 2025 so far and is currently trading at $15.43 per share with a market cap of $2.1 billion. With its business performance improving and new AI-driven features rolling out, LSPD stock could be a great long-term pick.