Despite heightened volatility in Canadian equity markets – driven by easing metal prices and elevated valuations – the S&P/TSX Composite Index is up 0.9% year to date and 25.1% over the past 12 months. However, the following two Canadian stocks have failed to participate in this rally for various reasons and are now trading at substantial discounts to their 52-week highs. Given their discounted valuations and strong growth prospects, these stocks present attractive buying opportunities.
Shopify
Amid the broader sell-off in the technology sector, Shopify (TSX: SHOP) – which provides essential internet infrastructure that enables businesses to start, operate, and scale globally – has faced significant pressure over the past three months. The stock has fallen nearly 40% from its 52-week high. Amid the sell-off, its next 12 months’ price-to-sales and price-to-earnings have corrected to 10.8 and 65.8, respectively. Given its strong long-term growth outlook, this pullback offers an ideal entry point for investors with a three-year investment horizon.
The continued adoption of omnichannel commerce represents a powerful long-term tailwind for Shopify. In addition, the company is helping small and mid-sized businesses navigate an increasingly complex global regulatory environment, further enhancing its value proposition and deepening merchant relationships.
Shopify is also investing heavily in innovation to improve product discovery, streamline the purchasing experience, and enhance the post-purchase journey. The company has created strategic partnerships with leading artificial intelligence (AI) firms to develop advanced tools tailored to merchants’ evolving needs. It has also partnered with significant logistics and fulfillment providers to accelerate delivery times and offer more flexible, reliable shipping options.
Alongside these growth initiatives, Shopify is improving operational efficiency through greater automation and deeper AI integration, positioning the company for sustained, profitable growth. Given these multiple growth drivers, I expect Shopify to continue delivering strong operating performance in the coming quarters, supporting long-term share price appreciation.
goeasy
Second on my list is goeasy (TSX: GSY), a Mississauga-based alternative financial services company that provides leasing and lending solutions to subprime customers. The stock has faced substantial selling in recent months, falling more than 40% from its 52-week high. A short-seller report from Jehoshaphat Research and weaker-than-expected third-quarter results have hurt investors’ sentiments. As a result, goeasy now trades at compressed valuation levels, with its next 12 months (NTM) price-to-sales and price-to-earnings multiples declining to 1.1 and 6.7, respectively.
Meanwhile, the company continues to deliver solid operating performance. During the third quarter, goeasy originated $946 million in loans, expanding its loan portfolio to $5.4 billion. This growth drove a 15% increase in revenue to $440 million. Encouragingly, asset quality also improved, with the annualized net charge-off rate declining by 30 basis points to 8.9%, supported by higher secured lending and ongoing enhancements in credit underwriting and collections.
Looking ahead, credit demand is likely to remain resilient in a low-interest-rate environment, benefiting goeasy’s core business. The company’s expanding product suite, broader distribution network, adoption of next-generation credit models, tighter underwriting standards, and more disciplined collection practices should continue to support asset-quality improvement and long-term profitability.
Management expects the loan portfolio to reach $7.35–$7.75 billion by 2027, with the midpoint of this range implying a 39% increase from third-quarter levels. The management also expects its revenue to grow at a compound annual rate of 11.3% through 2027, alongside an expansion in operating margins to 43%. These projections underscore the strength of goeasy’s growth outlook.
In addition, goeasy has increased its dividend for 11 consecutive years and currently offers an attractive dividend yield of 4.6%. Given its discounted valuation, healthy yield, and strong growth prospects, goeasy appears to be an excellent buying opportunity at current levels.
