Amid the expectation of rate cuts by the Federal Reserve due to easing inflation and solid second-quarter earnings, the S&P/TSX Composite Index has continued its uptrend, rising 12.9% year to date. However, the following two Canadian stocks have failed to impress investors and have lost a substantial percentage of their stock values this year. Given their discounted stock prices and healthy growth prospects, I expect these stocks to outperform over the next three years.
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Lightspeed Commerce
Lightspeed Commerce (TSX: LSPD), which offers omnichannel commerce solutions to businesses worldwide, has been under pressure this year, with the company losing 22% of its stock value. Meanwhile, the company posted a healthy first-quarter performance of fiscal 2026 last month, beating its guidance. Its top line of $304.9 million was higher than its guidance of $285-$290 million. Year over year, its revenue grew 14.6% amid the expansion of customer locations and increased ARPU (average revenue per user). Increased software prices and growing adoption of its payments have increased its ARPU.
Meanwhile, the company’s net losses rose from $35 million to $49.6 million. Higher direct, general and administrative, research and development, sales and marketing, interest, and tax expenses led to an increase in its net losses. However, its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) increased by 55.9% to $15.9 million. Further, it ended the quarter with cash and cash equivalents of $447.6 million and is well-equipped to fund its growth initiatives.
Amid the expanding e-commerce market, enterprises are adopting an omnichannel selling model, thereby expanding Lightspeed’s addressable market. Also, the company is developing and introducing new innovative products and artificial intelligence-powered features to strengthen its position. Moreover, the company’s management has reiterated its three-year guidance, with its gross profit and adjusted EBITDA projected to grow at an annualized rate of 15-18% and 35%, respectively. Therefore, the Montreal-based company’s growth prospects look healthy. Further, the recent pullback in Lightspeed’s stock price has dragged its NTM (next-12-month) price-to-sales multiple down to an attractive 1.4, making it an excellent buy.
WELL Health Technologies
Another cheap Canadian stock that I am bullish on is WELL Health Technologies (TSX: WELL), which has lost 30.3% of its stock value this year. The ongoing investigation into Circle Medical’s billing practices appears to have made investors nervous, dragging its stock price down. However, it reported an excellent second-quarter performance last week with record revenue, adjusted EBITDA, and adjusted net income. Its revenue grew 57% to $356.7 million amid organic growth, acquisitions, and $40.5 million contributions from HEALWELL AI. It had over 1.7 million patient visits during the quarter, with around one million coming from Canada.
The tech-enabled healthcare company’s adjusted EBITDA rose 231% to $49.7 million during the quarter, while its adjusted EPS (earnings per share) came in at $0.10, representing a significant improvement from $0.02 in its previous year’s quarter.
Meanwhile, the growing adoption of virtual healthcare services and the digitization of clinical procedures have expanded the addressable market for WELL Health. Meanwhile, the company is developing and launching artificial intelligence-powered products to expand its customer base and strengthen its position. Additionally, the company is continuing with its inorganic expansions and has completed 14 acquisitions year to date. It has signed 15 letters of intent that can contribute $134 million to its annualized revenue. Considering its organic and inorganic growth initiatives, I believe its growth prospects look healthy. Additionally, the company currently trades at 11.3 times analysts’ projected earnings for the next four quarters, which looks cheap considering its healthy growth prospects. Considering all these factors, I expect WELL Health to deliver oversized returns over the next three years.
