TSX Stocks That May Be Trading Below Estimated Value In October 2024

October 04, 2024

As the Canadian market continues to reach new heights, buoyed by optimism surrounding central bank policies and robust corporate earnings, investors are keenly observing how these factors interplay with potential election-driven volatility. In this environment of cautious optimism, identifying stocks that may be trading below their estimated value can present unique opportunities for those looking to align their portfolios with solid fundamentals amidst broader market trends.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
Computer Modelling Group (TSX:CMG)	CA$11.41	CA$22.00	48.1%
goeasy (TSX:GSY)	CA$183.37	CA$362.97	49.5%
Savaria (TSX:SIS)	CA$22.35	CA$41.08	45.6%
Real Matters (TSX:REAL)	CA$9.05	CA$17.71	48.9%
Endeavour Mining (TSX:EDV)	CA$31.96	CA$62.41	48.8%
Viemed Healthcare (TSX:VMD)	CA$10.45	CA$20.08	48%
Kinaxis (TSX:KXS)	CA$158.50	CA$280.37	43.5%
Bragg Gaming Group (TSX:BRAG)	CA$6.63	CA$10.64	37.7%
Blackline Safety (TSX:BLN)	CA$5.91	CA$11.02	46.4%
Boyd Group Services (TSX:BYD)	CA$206.87	CA$337.90	38.8%

Click here to see the full list of 24 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

We'll examine a selection from our screener results.

Boyd Group Services (TSX:BYD)

Overview: Boyd Group Services Inc. operates non-franchised collision repair centers across North America and has a market cap of CA$4.40 billion.

Operations: The company generates revenue of $3.04 billion from its automotive collision repair and related services segment in North America.

Estimated Discount To Fair Value: 38.8%

Boyd Group Services is trading at CA$206.87, significantly below its estimated fair value of CA$337.9, suggesting it may be undervalued based on cash flows. Despite a forecasted revenue growth of 9.8% annually, earnings are expected to grow substantially at 44.6% per year, outpacing the Canadian market's average growth rate. However, recent financial results show declining net income and earnings per share compared to last year, which might concern potential investors looking for stability in cash flow metrics.

TSX:BYD Discounted Cash Flow as at Oct 2024

Computer Modelling Group (TSX:CMG)

Overview: Computer Modelling Group Ltd. is a software and consulting technology company that develops and licenses reservoir simulation and seismic interpretation software, with a market cap of CA$911.01 million.

Operations: The company's revenue is derived from CA$90.29 million in reservoir simulation and seismic interpretation software licensing and related services.

Estimated Discount To Fair Value: 48.1%

Computer Modelling Group (CMG) is trading at CA$11.41, significantly below its estimated fair value of CA$22, indicating potential undervaluation based on cash flows. Despite a forecasted revenue growth of 11.5% annually, slower than 20%, earnings are expected to grow significantly at 24.56% per year, surpassing the Canadian market's average growth rate. However, recent financial results reveal declining net income and profit margins over the past year alongside significant insider selling and an unstable dividend track record.

TSX:CMG Discounted Cash Flow as at Oct 2024

goeasy (TSX:GSY)

Overview: goeasy Ltd. offers non-prime leasing and lending services through its easyhome, easyfinancial, and LendCare brands to Canadian consumers, with a market cap of CA$3.03 billion.

Operations: The company's revenue is derived from its Easyhome segment, contributing CA$154.10 million, and the Easyfinancial segment, generating CA$1.24 billion.

Estimated Discount To Fair Value: 49.5%

goeasy, trading at CA$183.37, is significantly undervalued based on cash flows with an estimated fair value of CA$362.97. The company forecasts robust revenue growth of 31.6% annually, outpacing the Canadian market's average. However, debt coverage by operating cash flow remains a concern and insider selling has been significant recently. Despite these challenges, analysts predict a 28.8% rise in stock price while earnings are projected to grow faster than the market at 17.1% annually.

TSX:GSY Discounted Cash Flow as at Oct 2024

Next Steps

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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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