Canadian equity markets have rebounded strongly from last month’s lows, supported by a ceasefire announcement and ongoing peace talks between the United States and Iran, which improved investor sentiment and lifted the S&P/TSX Composite Index.
Despite this recovery, several Canadian stocks continue to trade at meaningful discounts to their recent highs, presenting attractive entry points for long-term investors. Against this backdrop, let’s take a closer look at three such stocks in detail.
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Waste Connections
Waste Connections (TSX:WCN), a provider of non-hazardous solid waste collection, transfer, and disposal services, has seen its stock come under pressure in recent months, falling around 18% from its 52-week high. The decline has been driven by weaker recycled commodity prices, lower landfill gas renewable energy credits, softer waste volumes, and delays in reopening its Chiquita Canyon landfill.
However, the company’s long-term outlook remains strong. Waste Connections continues to expand through organic initiatives and strategic acquisitions. After commissioning five renewable natural gas (RNG) facilities, it is advancing several additional projects that could come online by year-end. In addition, management intends to remain active on acquisitions, supported by a solid balance sheet and strong cash flows, with a pipeline of private companies capable of generating around $5 billion in annualized revenue.
Given its resilient growth prospects and recent share price pullback, Waste Connections appears to offer an attractive entry point for long-term investors.
Dollarama
Dollarama (TSX:DOL) is another stock I believe is currently undervalued. The shares have come under pressure following its fourth-quarter results, declining around 19% from their 52-week high. In the quarter, revenue rose 11.7% to $2.1 billion, while adjusted earnings per share (EPS) increased modestly by 2.1% to $1.43. However, same-store sales growth of 1.5% fell short of the 2.6% analysts had expected, even though adjusted EPS slightly exceeded estimates.
Looking ahead, management expects store expansion to return to its historical pace of 60–70 openings this fiscal year, following an elevated rollout in fiscal 2026. It also forecasts same-store sales growth of 3–4%, which is below market expectations. Additionally, capital expenditures are projected to increase to $420–$470 million from $252.6 million in fiscal 2026, largely due to investments in a new logistics hub in Western Canada. These softer near-term expectations have weighed on the stock.
Despite this, Dollarama’s long-term growth story remains compelling. The discount retailer plans to expand its Canadian store count from 1,691 to 2,200 and its Australian footprint from 402 to 700 locations by 2034. Furthermore, its stake in Dollarcity offers additional upside, with plans to grow store count from 712 to 1,050 by 2031. Considering these expansion opportunities and its recent pullback, Dollarama appears well-positioned for long-term investors.
Shopify
Shopify (TSX:SHOP) would be my final pick. The stock has fallen by 32% from its 52-week high, pressured by macroeconomic uncertainty, valuation concerns, and skepticism around the potential impact of artificial intelligence (AI) on the software sector. However, this pullback presents an attractive entry point for long-term investors given its strong growth outlook.
The ongoing shift toward omnichannel commerce continues to create meaningful long-term opportunities for Shopify. To capitalize on this trend, the company is investing in innovative, integrated solutions—including AI-powered tools—while expanding its payments platform into new markets and strengthening its presence across both direct-to-consumer (D2C) and business-to-business (B2B) segments.
In addition, Shopify focuses on improving operating efficiency through disciplined headcount management, greater use of AI and automation, and enhancements to its internal project and talent management systems. These initiatives could further support margin expansion and earnings growth over time. Given its robust growth prospects and recent share price correction, Shopify appears to be a compelling buy at current levels.
