The Canadian equity markets have witnessed healthy buying this year, with the S&P/TSX Composite Index rising 23%. Improving quarterly performances and falling interest rates have enhanced investors’ confidence, driving the equity markets. However, the following three stocks have failed to participate in this rally and are down over 25% year to date. Given their discounted stock prices and healthy growth prospects, I expect these three stocks to outperform over the next three years.
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Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD) offers products and services to small- and medium-scale enterprises to operate and expand their businesses. Amid rising competition and increased net losses in its recently reported first quarter of fiscal 2026, the company has lost 25.1% of its stock value this year. However, the demand for the company’s products and services continues to rise amid increased adoption of the omnichannel selling model. The company is expanding its product offerings, including AI (artificial intelligence)-powered products, to broaden its customer base and drive its market share.
Additionally, it has undertaken several cost-cutting initiatives, including automating repetitive and predictable tasks through AI, which could improve its operating margins. Amid all these growth prospects, Lightspeed’s management predicts that its gross profits and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) will grow at an annualized rate of 15-18% and 35% over the next three years, respectively. The company’s valuation looks reasonable, with its NTM (next-12-month) price-to-sales and NTM price-to-earnings multiples currently standing at 1.2 and 22.1, respectively. Considering all these factors, I expect Lightspeed to deliver solid returns over the next three years.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) is another Canadian stock that has experienced a significant decline this year, with its share price dropping more than 27.5%. The company’s stock has come under pressure following an ongoing investigation into the billing practices of its subsidiary, Circle Medical. However, it has posted an impressive second-quarter performance, with its revenue growing by 57% amid organic growth and strategic acquisitions. Driven by strong revenue growth and expanding gross margins, the company’s adjusted EBITDA surged 231% to $49.7 million. Its adjusted EPS (earnings per share) stood at $0.10, representing a 400% increase from the previous year’s quarter.
Moreover, the rising popularity of virtual healthcare services and increased digitization of clinical procedures have created a long-term growth potential for WELL Health. Additionally, the company is steadily broadening its product portfolio to address the evolving needs of its customers. Additionally, it has signed letters of intent to acquire 15 assets that can contribute $134 million to its annualized revenue. Despite its healthy growth prospects, WELL Health trades at NTM price-to-sales and price-to-earnings multiples of 0.8 and 11.6, respectively, making it an excellent buy.
Docebo
My final pick is Docebo (TSX:DCBO), which has lost more than 41% of its stock value this year. The departure of key executives and rising competition have made investors nervous, leading to the selloff. The steep pullback has dragged its NTM price-to-sales and NTM price-to-earnings multiples down to three and 18.6, respectively.
Meanwhile, the Learning Management System market is experiencing strong growth, driven by the increasing adoption of digital learning solutions across academic and corporate sectors, along with technological advancements that enable more personalized, scalable, and cost-efficient training platforms. Amid the expanding addressable market, Docebo continues to strengthen its position by actively enhancing its platform through AI-powered features. Also, most of its customers have signed multi-year agreements, thereby providing stability to its financials.
Meanwhile, Docebo’s management projects its top line to grow 10-11% this year, while its adjusted EBITDA could expand from 15.5% in the last year to 17-18%. Considering its healthier growth prospects, improving margins, and attractive valuation, I believe Docebo would be an excellent buy at these levels.
