TSX Value Stocks Estimated To Be Trading Below Intrinsic Worth October 2025

As the Canadian market navigates through economic uncertainties, including trade-policy concerns and fluctuating interest rate expectations, investors are keenly observing sectors that might offer value amidst these conditions. In this context, identifying stocks trading below their intrinsic worth becomes crucial for those looking to capitalize on potential undervaluation opportunities in the TSX.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Click here to see the full list of 26 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.

Constellation Software (TSX:CSU)

Overview: Constellation Software Inc. acquires, builds, and manages vertical market software businesses to provide mission-critical solutions for public and private sectors, with a market cap of CA$83.41 billion.

Operations: The company's revenue primarily comes from its Software & Programming segment, which generated $10.74 billion.

Estimated Discount To Fair Value: 22.4%

Constellation Software, trading at CA$3936.19, is undervalued based on discounted cash flow analysis with a fair value estimate of CA$5070.94. Despite recent leadership changes and a drop in net income to US$56 million for Q2 2025, the company maintains strong fundamentals with forecasted earnings growth of over 21% annually and revenue growth outpacing the Canadian market. Analysts anticipate a 39.3% price increase, highlighting its potential for value investors focused on cash flows.

• Upon reviewing our latest growth report, Constellation Software's projected financial performance appears quite optimistic.
• Delve into the full analysis health report here for a deeper understanding of Constellation Software.

Exchange Income (TSX:EIF)

Overview: Exchange Income Corporation operates in aerospace and aviation services and equipment, as well as manufacturing businesses globally, with a market cap of CA$3.93 billion.

Operations: The company generates revenue from its aerospace and aviation services and equipment segment, which accounts for CA$1.69 billion, and its manufacturing segment, contributing CA$1.10 billion.

Estimated Discount To Fair Value: 36.9%

Exchange Income Corporation, trading at CA$75.83, is significantly undervalued with a fair value estimate of CA$120.13 based on discounted cash flow analysis. Despite earnings not fully covering interest payments and dividends of 3.48%, its earnings are forecast to grow by 31.6% annually, outpacing the Canadian market's growth rate of 11.4%. Recent quarterly results show increased revenue and net income compared to last year, supporting its potential for value investors focused on cash flows.

• Insights from our recent growth report point to a promising forecast for Exchange Income's business outlook.
• Click to explore a detailed breakdown of our findings in Exchange Income's balance sheet health report.

Meren Energy (TSX:MER)

Overview: Meren Energy Inc. is an oil and gas exploration and production company operating in Nigeria, Namibia, South Africa, and Equatorial Guinea with a market cap of CA$1.18 billion.

Operations: Meren Energy Inc.'s revenue is derived from its operations in oil and gas exploration and production across Nigeria, Namibia, South Africa, and Equatorial Guinea.

Estimated Discount To Fair Value: 43.5%

Meren Energy, trading at CA$1.75, is highly undervalued with a fair value estimate of CA$3.10 based on discounted cash flow analysis. Despite significant past shareholder dilution and dividends not being well covered by earnings or free cash flows, the company shows strong potential with forecasted annual revenue growth of 22.4%, outpacing the Canadian market's 4.9%. Recent earnings reveal substantial net income improvement year-over-year, enhancing its appeal for value-focused investors.

• Our earnings growth report unveils the potential for significant increases in Meren Energy's future results.
• Unlock comprehensive insights into our analysis of Meren Energy stock in this financial health report.

Turning Ideas Into Actions

• Access the full spectrum of 26 Undervalued TSX Stocks Based On Cash Flows by clicking on this link.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Want To Explore Some Alternatives?

• 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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