Investing in fundamentally strong companies that trade at an attractive multiple is a proven strategy to generate outsized gains over time. One such cheap Canadian stock is Mattr (TSX:MATR), which is valued at a market cap of $645 million.
Mattr is a Canadian materials technology company that serves transportation, communication, water management, and energy markets globally. Operating through two segments, it manufactures composite technologies, including flexible pipes for oil and gas applications under the Flexpipe brand and fibreglass storage tanks plus stormwater management products under the Xerxes brand.
Its Connection Technologies segment produces heat-shrinkable tubing, sleeves, and low-voltage wiring solutions for industrial applications.
The TSX stock has grossly underperformed the broader markets since its initial public offering in 2010. MATR stock is down 82.5% below all-time highs and has declined by 60% over the last 15 years.
Here’s why MATR stock could be the best bargain buy on the TSX today.
The bull case for this Canadian stock
In the second quarter (Q2) of 2025, Mattr reported revenue of $321 million, an increase of 33% year over year, with an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $42.5 million, up 5%.
The Connection Technologies segment achieved record quarterly performance with revenue nearly doubling, thanks to the AmerCable acquisition completed late last year. The combined backlog of cross-selling opportunities between AmerCable and Shawflex now exceeds $10 million for delivery in 2026.
However, copper tariffs introduced by the U.S. administration present meaningful challenges. Mattr spends between $100 million and $130 million annually on copper products, making it the company’s largest material input cost.
Management estimates current tariffs will increase costs by mid-single digits even after mitigation efforts. These costs will likely be passed through to customers, which may impact buying behaviour amid higher prices.
Mattr also accelerated supply chain diversification to source more materials within the U.S. to reduce exposure. The Composite Technologies segment faces headwinds with revenue falling 5% in Q2 as international Flexpipe projects slowed, while Xerxes faced production constraints despite robust demand.
Management highlighted that Xerxes set a quarterly revenue record while underperforming on output due to workforce challenges at its new South Carolina facility. The business currently holds its highest delivery backlog since 2021, with orders extending into the first half of 2026.
Flexpipe continues to showcase resilience by more than doubling revenue per completed well since 2021 through share gains in larger diameter products. The business now derives roughly 40% of revenue from five-inch and six-inch products with plans to introduce even larger diametres in early 2026, expanding the addressable market by over 50%.
Is the TSX stock undervalued?
Management expects third-quarter results to be modestly below second-quarter levels as market uncertainty persists, but remains confident the modernized production footprint positions Mattr for margin expansion in 2026.
Analysts tracking MATR stock forecast revenue to increase from $885 million in 2024 to $1.55 billion in 2029. Its free cash flow is forecast to improve to $168 million in 2029, compared to an outflow of $59 million in 2024.
If the TSX stock trades at 10 times forward FCF, which is reasonable, it should gain 160% within the next four years. Analysts remain bullish and forecast the stock to gain 22% over the next 12 months, given consensus price targets.
