The market is trading at all-time highs. Many TSX stocks are also trading at or around all-time highs. But don’t let this fool you into thinking that there’s limited upside to be had. These are exciting times for investors, and opportunities continue to abound in the market today.
One of the best TSX stocks for Canadians to buy today is Well Health Technologies Corp. (TSX:WELL). It’s a small cap stock that has been growing in a very big way. Let’s review this rising Canadian technology stock.
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Rapid growth
In the five years ended 2024, Well Health Technologies has grown at a rapid pace. Revenue increased more than 1,700% to $919 million. And net income increased to $32 million from a loss of almost $4 million. Finally, earnings per share (EPS) increased to $0.13, up from net losses in 2020.
In Well Health’s third quarter, the company continued to experience rapid growth. Revenue increased 56% to $365 million and adjusted EPS came in at $0.06, compared to a loss of $0.33 in the same period in 2024. This improvement was driven by both organic growth and growth via acquisitions as well as operational improvements, which are driving margins higher. For example, Well Health’s gross margin increased 510 basis points to 45.5%.
Positive cash flows
Beyond earnings, I think it’s a useful exercise to look at cash flows. In the last three quarters, Well Health reported positive cash flows. In the third quarter, Well Health’s free cash flow came in at $31.2 million. This is not a given with companies that are in the rapid growth phase, so it’s a good sign.
And the company is using some of this cash flow in order to give back to shareholders. As of the end of the third quarter, Well Health had bought back approximately 297,000 shares in 2025. Management has tackled shareholder dilution in this way, and it’s a good sign that the company is attempting to be shareholder-friendly.
What’s the deal with Well Health stock?
Today, Well Health’s stock price remains stuck below $5. As you can see from the graph below, the stock has really languished in the last few years.
In terms of valuation, Well Health stock is trading at a mere nine times this year’s estimated earnings. This is pretty cheap, especially given the growth that Well Health is experiencing.
But I would explain this low valuation and dismal recent stock price performance by pointing to the fact that Well Health is still in the early phases of its growth. This comes with a lot of implications. The first is that Well Health is spending a lot to achieve growth. While this is typical of a company that’s in this early stage of its growth path, it presents as a risk for investors.
So the funding of Well Health’s rapid growth in the next few years is something that is probably weighing on the stock. And so is the company’s plan to divest of certain lower-return assets and pour everything into its Canadian business. As you can see, it’s a complicated story, with a lot of moving parts. This presents added risks to the company. In my view, these are the things holding the stock price back.
But having said that, I think that all of this sets Well Health stock up as a very attractive buy for investors right now. Whenever the market doesn’t recognize the value in a company, it gives us a good opportunity.
The bottom line
Well Health Technologies stock presents as one of the best TSX stocks to buy. As the company continues its aggressive growth plan, I think that investors who get in now will be very nicely rewarded.
