3 TSX Stocks That May Be Trading Up To 42.8% Below Intrinsic Value Estimates

As Canadian investors navigate the complexities of the current market, they face a landscape shaped by robust AI demand and a steadfast commitment from the Fed to manage inflation. Despite these broader economic dynamics, opportunities may exist in stocks trading below their intrinsic value estimates, offering potential for growth as fundamentals remain supportive.

Top 10 Undervalued Stocks Based On Cash Flows In Canada

Name	Current Price	Fair Value (Est)	Discount (Est)
Tantalus Systems Holding (TSX:GRID)	CA$3.82	CA$7.18	46.8%
SECURE Waste Infrastructure (TSX:SES)	CA$24.86	CA$47.93	48.1%
Pan American Silver (TSX:PAAS)	CA$73.51	CA$140.07	47.5%
NFI Group (TSX:NFI)	CA$22.55	CA$43.37	48%
Lumine Group (TSXV:LMN)	CA$24.99	CA$49.95	50%
Groupe Dynamite (TSX:GRGD)	CA$62.36	CA$114.83	45.7%
Gildan Activewear (TSX:GIL)	CA$73.81	CA$147.27	49.9%
EQB (TSX:EQB)	CA$125.60	CA$219.66	42.8%
Constellation Software (TSX:CSU)	CA$3163.56	CA$5965.21	47%
Aritzia (TSX:ATZ)	CA$130.68	CA$246.02	46.9%

Click here to see the full list of 31 stocks from our Undervalued TSX Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Celestica (TSX:CLS)

Overview: Celestica Inc., along with its subsidiaries, offers supply chain solutions across Asia, North America, and globally, with a market capitalization of CA$47.78 billion.

Operations: The company's revenue is primarily derived from its Advanced Technology Solutions (ATS) segment, which accounts for $3.27 billion, and its Connectivity & Cloud Solutions (CCS) segment, contributing $12.32 billion.

Estimated Discount To Fair Value: 40.8%

Celestica appears undervalued based on cash flows, trading 40.8% below its estimated fair value of CA$701.42. With earnings forecasted to grow at 34.9% annually, significantly outpacing the Canadian market, and revenue expected to increase by 30.9% per year, the company shows strong growth potential. Recent financials reflect robust performance with Q2 sales reaching US$4.7 billion and net income improving notably from the previous year, despite a recent $3 billion equity offering completion potentially diluting shares.

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

EQB (TSX:EQB)

Overview: EQB Inc., operating through its subsidiary Equitable Bank, offers personal and commercial banking services to retail and commercial customers in Canada, with a market cap of CA$5.35 billion.

Operations: The company generates revenue of CA$875.56 million from its banking services segment, catering to both retail and commercial clients across Canada.

Estimated Discount To Fair Value: 42.8%

EQB is trading at CA$125.6, significantly below its estimated future cash flow value of CA$219.66, suggesting it may be undervalued based on cash flows. Despite a high level of bad loans at 2.2% and recent financial setbacks with a net loss in the third quarter, EQB's revenue growth forecast of 34.5% annually surpasses the Canadian market average, highlighting strong potential for future profitability and expansion following its acquisition of President's Choice Bank entities.

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

GFL Environmental (TSX:GFL)

Overview: GFL Environmental Inc. offers non-hazardous solid waste management services across Canada and the United States, with a market cap of CA$21.49 billion.

Operations: The company's revenue is derived from its non-hazardous solid waste management services, generating CA$5.35 billion in the USA and CA$2.50 billion in Canada.

Estimated Discount To Fair Value: 27.9%

GFL Environmental, trading at CA$59.54, is priced below its estimated future cash flow value of CA$82.55, reflecting potential undervaluation based on cash flows. Despite reporting a net loss of CAD 159.8 million in Q2 2026 and facing low forecasted return on equity at 8.3%, GFL's revenue growth projection of 7.8% annually outpaces the Canadian market average, bolstered by strategic expansions like new renewable natural gas facilities with OPAL Fuels Inc., enhancing long-term profitability prospects.

• The analysis detailed in our GFL Environmental growth report hints at robust future financial performance.
• Delve into the full analysis health report here for a deeper understanding of GFL Environmental.

Key Takeaways

• Navigate through the entire inventory of 31 Undervalued TSX Stocks Based On Cash Flows here.
• 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.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

Looking For Alternative Opportunities?

• 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com