Boyd Group Services and 2 other TSX stocks are priced below their intrinsic value for you to consider

The Canadian market has shown robust growth, up 4.0% last week and 12% over the past year, along with an optimistic forecast of 15% annual earnings growth. In such an environment, identifying stocks priced below their intrinsic value could present attractive opportunities for investors looking for potential gains.

The 10 most undervalued stocks in Canada based on cash flow

Click here to see the full list of 19 stocks from our Undervalued TSX Stocks Based on Cash Flows screener.

Here we highlight a subset of our favorite stocks from the screener.

Overview: Boyd Group Services Inc. operates a network of non-franchise collision repair centers throughout North America and has a market capitalization of approximately $5.50 billion Canadian.

Operations: The company generates revenue of C$3.02 billion from auto collision repair and related services.

Estimated discount to fair value: 27.7%

Boyd Group Services trades at CA$263.41, well below its estimated fair value of CA$364.49, which shows the company as undervalued based on a discounted cash flow analysis. Despite the challenges of covering interest payments with earnings, Boyd’s financial outlook is promising. Significant earnings growth of 37.6% annually is expected over the next three years, exceeding the Canadian market’s forecast of 15%. In addition, revenue growth forecasts are at 10.3% per year, also above the market average of 7.3%.

Overview: Constellation Software Inc. operates globally and focuses on acquiring, developing and managing software companies for vertical markets, primarily in Canada, the United States and Europe. The company has a market capitalization of approximately $88.79 billion Canadian dollars.

Operations: The company generates 8.84 billion Canadian dollars in the software and programming segment.

Estimated discount to fair value: 24.7%

Constellation Software is undervalued by 24.7% at CA$4200.62 compared to a fair value of CA$5580.23 based on a discounted cash flow analysis. Recent strategic expansions such as the launch of Omegro strengthen the company’s global software presence and promise sustainable growth with a focus on diverse software solutions and strong leadership under co-CEOs Kevin Bradley and Troy O’Connor. Despite high debt and significant insider selling in the last quarter, Constellation’s financial outlook remains solid. Earnings are expected to grow 24.43% annually over the next three years – well above the Canadian market forecast of 15%.

Overview: goeasy Ltd. operates in Canada and offers non-prime leasing and lending services through its brands easyhome, easyfinancial and LendCare with a market capitalization of 3.09 billion Canadian dollars.

Operations: The company generates revenue from its leasing and lending services, including C$153.99 million from easyhome and C$1.17 billion from easyfinancial.

Estimated discount to fair value: 39.2%

goeasy Ltd., currently trading at CA$190.15, is considered to be undervalued by 39.2% compared to a fair value of CA$312.98 derived from discounted cash flow metrics. Despite challenges in covering debt with operating cash flows and a dividend that is not well covered by free cash flows, the company has promising financial indicators, with revenue and earnings expected to grow 32.5% and 15.5% per year, respectively – both beating Canadian market forecasts of 7.3% and 14.6%, respectively. Recent leadership changes indicate a strategic transition that may impact future leadership dynamics.

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This Simply Wall St article is of a general nature. We comment based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They are not a recommendation to buy or sell stocks and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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