Investors with a sizeable risk appetite should consider gaining exposure to undervalued growth stocks and hold them in a Tax-Free Savings Account (TFSA). Any returns generated in the TFSA from qualified investments are tax-exempt, making it an ideal registered account for growth-focused Canadians.
In this article, I have identified one top TSX stock TFSA investors should own as it has the potential to deliver game-changing returns over the next four years and beyond.
Valued at a market cap of $166 million, Profound Medical (TSX: PRN) is a commercial-stage medical device company that develops and markets incision-free therapeutic systems for the image-guided ablation of diseased tissue in Canada, Germany, the United States, and Finland.
Its flagship product is the TULSA-PRO system, which combines magnetic resonance imaging (MRI), robotically driven transurethral sweeping action/thermal ultrasound, with closed-loop temperature feedback control, to ablate the entire gland or a physician-defined region of malignant or benign prostate tissue.
The company also provides Sonalleve, which combines real-time MRI and thermometry for the treatment of uterine fibroids, adenomyotic tissue, palliative pain treatment of bone metastases, osteoid osteoma, and management of benign tumours.
Down almost 85% from all-time highs, this small-cap TSX stock remains a top investment in 2025. Let’s see why.
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The bull case of investing in this TSX stock
Profound Medical delivered mixed second-quarter results, with revenue of $2.2 million falling short of expectations despite receiving over $3 million in total orders. The medical device company continues to project 70–75% revenue growth for 2025, but acknowledged that the transition from placement to a capital sales model has created a back-end loaded revenue pattern.
Profound’s sales pipeline appears robust, with nearly 500 prospects in the targeting stage and 80 qualified leads progressing through the verification, negotiation, and contracting phases.
Currently operating 60 active sites with plans to reach 75 by year-end, Profound has demonstrated encouraging same-store utilization growth of 10% between quarters.
Two significant clinical milestones were achieved during the quarter. The CAPTAIN randomized controlled trial completed full patient enrollment with 212 patients, exceeding the initial target of 201 patients.
Early perioperative results presented at the American Urological Association meeting demonstrated superior patient outcomes compared to robotic surgery. They included no blood loss, no overnight stays, and significantly less post-procedural pain. These findings position TULSA favourably for inclusion in professional society treatment guidelines and potential positive reimbursement coverage from private payers.
The company also launched its pilot TULSA-AI volume reduction software for BPH treatment, targeting procedure times of 60–90 minutes regardless of prostate size. This development enables physicians to create full TULSA treatment days combining both cancer and BPH patients, improving operational efficiency. Published 12-month BPH outcomes from a Finnish study showed 76% improvement in symptom scores, with 96% of patients discontinuing BPH medications.
Financial challenges persist, resulting in a net loss of $15.7 million and operating expenses of $15.4 million, although gross margins improved to 73%.
Profound ended Q2 with $35.2 million in cash and expects the burn rate to reduce in the second half of 2025 as working capital converts to sales.
Why is this TFSA stock undervalued?
Analysts expect Profound Medical to increase sales from $23.7 million in 2024 to $249 million in 2029. While still unprofitable, the TSX stock is expected to end 2029 with adjusted earnings per share of $1.86 compared to a loss per share of $2.17. Moreover, its free cash flow is forecast at $62.3 million in 2029, compared to an outflow of $32.5 million in 2024.
If the healthcare stock is priced at 20 times forward earnings, it should gain roughly 750% from current levels. It means an investment of $7,000 in PRN stock today could be valued at more than $50,000 in less than four years.
