Though the TSX 60 index is trading near all-time highs, several Canadian stocks across multiple sectors are priced at a discount in October 2025. In this article, I have identified two such discounted stocks that Bay Street is overlooking right now.
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Is this Canadian stock undervalued?
Valued at a market cap of $148 million, Sylogist (TSX:SYZ) provides mission-critical software-as-a-service solutions to public sector customers in Canada, the United States, the United Kingdom, and internationally.
In the second quarter (Q2) of 2025, Sylogist grew its bookings by 33% year over year, the second-highest bookings performance in company history. The software firm has successfully transformed into a software-as-a-service (SaaS) driven enterprise, with recurring revenue now representing 70% of total revenue, up from 62% a year ago. Its annual recurring revenue (ARR) stood at $43.8 million, while SaaS ARR grew to $31.7 million, up 12.5% year over year.
The quarter ended in June saw some temporary headwinds from extended decision cycles in the education sector and implementation timing shifts in the municipal market. Management views these delays as short-term and expects deferred ARR to materialize in the coming quarters. Notably, partners are already ramping up staffing to accelerate implementations.
SaaS subscription revenue climbed 13% even as external funding pressures impacted a small group of legacy customers. It reported a net revenue retention rate of 107% in Q2, which indicates existing customers increased spending by 7% over the last 12 months.
Analysts tracking the TSX tech stock forecast revenue to increase from $64.4 million in 2025 to $124.4 million in 2029. In this period, its free cash flow is forecast to improve from $4.53 million to $32.3 million.
If the tech stock is priced at 10 times forward FCF, it should more than double within the next four years.
Is this top TSX stock a good buy?
Valued at a market cap of $10.5 billion, TFI International (TSX:TFII) provides transportation and logistics services in the United States, Mexico, and Canada.
TFI International showcased impressive margin expansion across business segments in Q2 despite ongoing headwinds. The transportation giant reported a free cash flow of $182 million in Q2, an increase of 20% year over year.
Operating income was $170 million, yielding a 9.5% margin, up from 8.5% last year. It achieved sequential margin gains across its portfolio, with less-than-truckload improving 360 basis points from Q1 and Truckload advancing 250 basis points. These improvements reflect aggressive cost control measures and efficiency gains at acquired operations.
Management deployed capital strategically during the quarter, repurchasing $85 million in shares and paying $39 million in dividends. The company also strengthened its financial position through a private placement bond offering at 4.8% fixed rates, replacing debt at 6.1% while extending maturities and better aligning the currency mix with cash flows.
Analysts tracking the TSX stock forecast revenue to increase from $8.12 billion in 2025 to $10.22 billion in 2029. In this period, its adjusted earnings are forecast to expand from $4.48 per share to $10.51 per share.
Today, TFII stock is trading at 17.7 times forward earnings, above its 10-year average of 15 times. If TFII can maintain its current multiple, it should surge by 50% over the next four years.
