The ongoing bull run has driven the broader markets towards all-time highs. However, several Canadian stocks trade well below record levels in January 2026. One such small-cap TSX stock is Mattr Corp (TSX:MATR).
Valued at a market cap of $506 million, Mattr is a materials technology company. In the last 10 years, the Canadian stock has fallen 70%, grossly underperforming the broader markets. But let’s see why it’s a good time to gain exposure to this beaten-down stock right now.
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The bull case of investing in this TSX stock
Mattr serves companies across sectors such as transportation, energy, and infrastructure. The firm operates through two segments:
- Composite Technologies produces flexible pipes and underground storage tanks for oil, gas, and water applications.
- Connection Technologies manufactures heat-shrinkable products and low-voltage electrical components for industrial automation and instrumentation.
Mattr Corp delivered mixed third-quarter results as it navigates a challenging macroeconomic environment while completing a major four-year transformation.
Its sales in Q3 rose 39% year over year to $314.9 million, driven by the AmerCable acquisition. However, adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew just 16% to $34 million due to margin pressures across operating segments.
The Connection Technologies segment posted strong top-line growth with revenue more than doubling to $184.2 million. The segment benefited from AmerCable’s addition and record quarterly sales at Shawflex, which successfully ramped up production at its relocated Toronto facility.
However, profitability was under pressure from an unfavourable product mix, elevated freight costs, and tariff-related expenses. The company’s DSG-Canusa business struggled with production challenges at its new Ohio facility, forcing management to import products from German and Chinese operations at higher cost.
Management acted swiftly to mitigate the impact of new copper duties when they were announced in August. The wire and cable team rewired its supply chain within weeks, avoiding almost $50 million in annual tariff costs.
While the supply chain shift increased working capital due to less favourable payment terms, the trade-off is worthwhile given the substantial cost-savings it achieved.
The Composite Technologies business faced headwinds from weak oil prices and reduced drilling activity. Segment revenue declined 4% to $130.7 million as lower oilfield completions weighed on Flexpipe sales.
Despite this, Flexpipe continued to gain market share through larger-diameter products, which now represent nearly 50% of North American revenue. The company expects to release additional large-diameter variants around year-end, expanding its addressable market by 50% or more.
Xerxes maintained strong demand across retail fuel, data centre, and infrastructure applications. The business exited the quarter with a record backlog representing six to nine months of forward revenue. Production increased by more than 10% sequentially as new facilities ramped up, though seasonal ground conditions will limit fourth-quarter shipments.
Management expects Q4 results decline sequentially due to seasonal factors and ongoing weakness in Canadian industrial markets. Matt r has paused buybacks and plans to use excess cash flow to lower balance sheet debt and strengthen the balance sheet.
Management declined to provide forward guidance, citing uncertainty around tariffs, commodity prices, and Canadian economic conditions.
What is the TSX stock price target?
Analysts tracking MATR stock forecast it to end 2029 with free cash flow of $168 million, compared to an outflow of $10.2 million this year.
Moreover, its adjusted earnings are forecast to double from $0.43 per share in 2025 to $0.89 per share in 2027.
The TSX stock is trading at 10.8 times forward FCF, below its three-year average of 18 times. At the current multiple, MATR stock could gain over 250% in the next three years.
Given consensus price targets, the TSX stock is trading at a 15% discount.
