TSX Stocks Estimated To Be Trading Below Fair Value In August 2025

As the Canadian market navigates a period of economic adjustment, with unemployment rates slightly elevated and inflation pressures showing signs of moderation, investors are keenly observing opportunities that may arise from these shifting dynamics. In this context, identifying stocks trading below their fair value can be particularly appealing, as they might offer potential for growth when market conditions stabilize.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 25 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

kneat.com (TSX:KSI)

Overview: kneat.com, inc. designs, develops, and supplies software for data and document management in regulated environments across North America, Europe, and the Asia Pacific with a market capitalization of CA$569.16 million.

Operations: The company generates revenue by providing software solutions for data and document management in regulated sectors across North America, Europe, and the Asia Pacific.

Estimated Discount To Fair Value: 17.6%

Kneat.com is trading at CA$5.6, below its estimated fair value of CA$6.79, reflecting a 17.6% undervaluation based on discounted cash flow analysis. With expected annual earnings growth of 62.3%, surpassing the Canadian market's forecast, and revenue projected to grow by 23.1% annually, Kneat.com shows strong potential for future cash flow generation despite recent losses narrowing significantly from previous years, indicating improved financial health and operational efficiency.

• Our growth report here indicates kneat.com may be poised for an improving outlook.
• Click to explore a detailed breakdown of our findings in kneat.com's balance sheet health report.

Propel Holdings (TSX:PRL)

Overview: Propel Holdings Inc., with a market cap of CA$1.40 billion, operates as a financial technology company through its subsidiaries.

Operations: Propel Holdings generates revenue of $492.16 million from providing lending-related services to borrowers, banks, and other institutions.

Estimated Discount To Fair Value: 25%

Propel Holdings, trading at CA$35.71, is undervalued by over 20% based on discounted cash flow analysis, with a fair value estimate of CA$47.62. The company reported second-quarter net income of US$15.08 million, up from US$11.12 million the previous year. Despite significant insider selling recently and debt not well-covered by operating cash flow, Propel's earnings are forecast to grow significantly faster than the Canadian market over the next three years.

• Our comprehensive growth report raises the possibility that Propel Holdings is poised for substantial financial growth.
• Click here and access our complete balance sheet health report to understand the dynamics of Propel Holdings.

5N Plus (TSX:VNP)

Overview: 5N Plus Inc. is a company that produces and sells specialty semiconductors and performance materials across the Americas, Europe, Asia, and internationally, with a market cap of CA$1.38 billion.

Operations: The company's revenue segments include $238.86 million from Specialty Semiconductors and $95.03 million from Performance Materials.

Estimated Discount To Fair Value: 38.4%

5N Plus, priced at CA$15.44, is considered undervalued by over 20% with a fair value of CA$25.07 based on discounted cash flow analysis. Recent earnings reports show strong growth, with Q2 net income reaching US$15.23 million from US$4.79 million the previous year. Despite its debt not being well-covered by operating cash flow, the company's earnings are projected to grow faster than the Canadian market at 19.4% annually over the next few years.

• Our expertly prepared growth report on 5N Plus implies its future financial outlook may be stronger than recent results.
• Take a closer look at 5N Plus' balance sheet health here in our report.

Turning Ideas Into Actions

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Interested In Other Possibilities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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