Amid better-than-expected second-quarter performance and expectations of interest rate cuts by the United States Federal Reserve, the Canadian equity markets have continued their uptrend. The S&P/TSX Composite Index rose to a new high yesterday and closed the day 0.2% higher. Year to date, the index is up over 15.7%.
Despite the recent increase in broader equity markets, the following two TSX stocks have lost over 30% of their stock values from their recent highs. Given their healthy long-term growth prospects, I believe investors can utilize these steep corrections to accumulate the stocks to reap superior returns.
Source: Getty Images
Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD) offers highly flexible omnichannel solutions to businesses that can help them operate and expand their businesses worldwide. The Montreal-based company has been under pressure over the last few months, with its stock price falling around 38% from its 52-week high. However, it reported an impressive first-quarter performance of fiscal 2026 in July, with its top line exceeding its guidance. Supported by the expansion of its customer locations and an increase in ARPU (average revenue per user), its revenue grew 15% year over year to US$304.9 million.
Meanwhile, its gross profits grew 19% to US$129.1 million, while gross margin expanded from 41% to 42%. Its cost-controlling initiatives and targeted price increases led to the expansion of its gross margin. However, its net losses increased from US$35 million to US$49.6 million due to an increase in direct, research and development, general and administrative, sales and marketing, interest, and tax expenses. Meanwhile, removing special or one-time items, its adjusted net income came in at US$7.9 million, or US$0.06 per share, representing a decline from $US$0.10 in the previous year’s quarter. The company also ended the quarter with cash and cash equivalents of $447.6 million, well-equipped to fund its growth initiatives.
Meanwhile, Lightspeed continues to launch new artificial intelligence-powered products and geographically expand its product reach to grow its customer base and support its financial growth. Additionally, it utilizes artificial intelligence (AI) to enhance its operational efficiency and improve its margins. Amid these growth initiatives, the company’s management expects its gross profits and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to grow by 15-18% and 35%, respectively, for the next three years. Considering its healthy growth prospects and discounted stock price, I believe Lightspeed would be an excellent buy now.
Docebo
Another Canadian stock that has witnessed substantial selling over the last few months is Docebo (TSX:DCBO), which offers a highly customizable e-learning platform to businesses across various sectors. The Toronto-based company has lost around 44% of its stock value compared to its November highs. The expectation of growth slowing amid rising competition, along with the departure of key executives, has led to a decline in its stock price.
Meanwhile, the company reported an impressive second-quarter performance last month, exceeding its guidance. Further, the demand for LMS (learning management systems) solutions is rising amid growth in remote working and learning. Several market research companies predict that the global LMS market will grow in double digits for the remainder of this decade. Given its highly customizable platform and AI-powered features, I believe Docebo is well-equipped to benefit from this addressable market growth. Additionally, its valuation also looks reasonable, with its next-12-month price-to-earnings multiple at 21.8, making it an excellent buy.
