In this market, it’s hard for many investors to find truly oversold or undervalued stocks to consider. That’s for a good reason – the TSX is trading near all-time highs, as many global investors look for opportunities outside the U.S. market. As it happens, the Canadian market has been one of the best places to invest in recent years.
I don’t think that’s going to change in the near term. And over the long term, I think there’s still opportunities to be had, particularly with a few key companies that have seen significant declines of late.
Here’s one of my top ideas for investors looking for an oversold opportunity right now.
Source: Getty Images
Shopify
Canadian e-commerce giant Shopify (TSX: SHOP) has declined a whopping 35% from its recent 52-week high. Now, while the stock is still roughly flat over the course of the past year (signalling this move is a short-term one in nature), there are reasons why many investors are starting to look at this move as one that’s worth buying.
I think the fact that Shopify’s growth engine is reaccelerating is one of the central tenets to this stock’s investment thesis. In 2025, Shopify delivered 30% revenue growth and a 17% free cash flow margin. That capped off a year in which Q4 revenue jumped 31% and the free cash flow margin hit 19%. Indeed, this combination of robust top-line growth and expanding profitability is exactly what growth investors want to see as a company exits its “build at all costs” phase and matures into a disciplined cash generator.
At the same time, gross merchandise volume (GMV) grew 29% in 2025, roughly tripling GMV compared to 2020. This move highlights how deeply Shopify has embedded itself as the operating system for modern commerce. This isn’t a niche platform anymore. It’s a core infrastructure platform for millions of merchants worldwide.
Valuation relative to fundamentals
I think most investors are well aware of Shopify’s core growth engine, and it’s the key reason why Shopify is a company that’s still so richly valued after its recent intra-year decline.
That said, despite these tailwinds, the stock is trading roughly 45% below its 52-week high, reflecting volatility rather than a broken thesis. Shares remain notoriously volatile, with frequent swings of more than 5% in a single session, but that volatility can be an ally for patient buyers willing to accumulate on weakness.
For Canadian investors looking for a homegrown tech champion with global scale, double-digit revenue growth, rising free cash flow, and a long runway in AI-enhanced commerce, Shopify still stands out as a potential long-term winner. While near-term sentiment can swing with macro headlines or quarterly guidance tweaks, there’s a multi-year growth story here investors can’t ignore. With a highly profitable and more focused management team, I think Shopify’s status as the entrenched commerce platform for millions of businesses around the world remains intact.
As such, this is a 35% pullback I think is worth considering, particularly for those thinking 5 or 10 years down the line.
