The broader equity market has maintained the upward trajectory in 2025, with many Canadian stocks registering significant growth. Despite the rally, a few fundamentally strong stocks remain undervalued at the current levels, presenting a buying opportunity for long-term investors.
Against this backdrop, here are two TSX stocks that are trading below their intrinsic value but have significant growth potential.
goeasy
goeasy (TSX:GSY) is one of the best undervalued stocks offering high growth and reliable dividend income. This Canadian financial services firm specializes in non-prime consumer lending and has been delivering strong financial results. Thanks to its strong earnings, the company has been rewarding shareholders with higher dividend payments. Moreover, goeasy stock has consistently delivered above-average capital gains.
Over the past five years, goeasy’s top line grew at a compound annual growth rate (CAGR) of 22.7% (as of June 30). Higher revenue, along with operating leverage, has led to significant growth in its bottom line, which grew at a CAGR of 23% during the same period. Notably, goeasy stock has surged over 289% in the last five years, which implies a CAGR of 31.2%. In addition to solid capital gains, goeasy has paid dividends consistently for 21 years and has raised its dividend for 11 consecutive years.
Looking ahead, goeasy is poised to deliver solid growth. With its leadership in Canada’s non-prime leasing and lending space and access to a diverse range of funding sources, the company is poised to continue to expand its consumer loan portfolio. Further, its focus on diversifying its product offerings and widening its distribution channels will enable it to acquire more customers, positioning it well to grow its top line. While its revenue could continue to grow at a solid double-digit rate, its strong underwriting capabilities, steady credit and payment performance, and operational efficiency will lay the groundwork for sustained profitable growth.
While goeasy has significant growth potential, its stock remains attractively priced. With a forward price-to-earnings ratio of 10.3, goeasy stock trades at a valuation that doesn’t justify its robust double-digit earnings growth, a rising dividend, and high return on equity (ROE). This makes it a compelling choice for long-term investors.
Lightspeed
Lightspeed Commerce (TSX:LSPD) stock is showing signs of a promising turnaround after taking a significant hit at the start of 2025. This Canadian tech giant’s decision to remain publicly listed instead of going private didn’t sit well with the investors, leading to a sharp selloff. While LSPD stock is still trading in the red on a year-to-date basis, it bounced back over 20% in the last three months, thanks to its improving fundamentals.
Despite the improving underlying trends, Lightspeed stock remains undervalued. It trades at a next 12-month (NTM) enterprise value-to-sales (EV/Sales) multiple of one, which is low considering its growing scale, focus on profitability, increase in customer locations in core markets of North America and Europe, and rising average revenue per user (ARPU). This attractive valuation makes it one of the best undervalued stocks to buy right now for long-term growth.
Lightspeed will capitalize on the shift in selling models toward omnichannel commerce. Its focus on growing its presence in North America and European markets will help attract more high-value customers and improve overall profitability. In addition, the company is tapping into diverse revenue streams and expanding its global payments platform, which will further enhance margins. As adoption of Lightspeed Payments increases, its profits are expected to increase, supporting the recovery of its stock..
With its low valuation, adjusted free cash flow nearing breakeven, and strong momentum across its payments, capital, and software segments, Lightspeed appears well-positioned for long-term, sustainable growth.
