While the TSX Index hovers near all-time highs, there are a few quality stocks that have underperformed the market over the last 12 months. However, investing in fundamentally strong growth stocks that trade at a cheap multiple is a proven strategy to generate outsized returns over time.
Here are two top Canadian stocks trading near 52-week lows.
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Is this TSX stock undervalued?
Valued at a market cap of over $1 billion, Docebo (TSX:DCBO) stock went public in late 2019 and has since returned 127% to shareholders. Despite its market-beating returns, the TSX tech stock is down almost 70% from all-time highs.
Docebo develops cloud-based learning management platforms that enable organizations to deliver personalized training, access off-the-shelf content, and analyze learning outcomes through advanced analytics. Its solutions include AI-powered authoring tools, mobile apps, e-commerce capabilities, and integrations with Salesforce and Microsoft Teams, providing comprehensive corporate learning experiences.
In Q1 2025, Docebo reported subscription sales of US$54.2 million, representing a 13% year-over-year increase. However, DCBO stock fell after the management lowered full-year revenue growth expectations to 9–10%, citing macroeconomic headwinds affecting the manufacturing, retail, and automotive sectors.
The departure of key executives, including the Chief Revenue Officer and Chief Product Officer raised concerns about the company’s execution capabilities amid a challenging market environment.
Management characterized these as strategic realignments rather than performance-related departures, but the timing alongside reduced guidance suggests operational challenges.
Further, Amazon Web Services, which accounts for 1.8% of total annual recurring revenue, did not renew its contract. Alternatively, Docebo achieved FedRAMP authorization, unlocking opportunities in the federal government that could provide upside.
The company’s AI-first transformation, including new creator tools and Project Harmony’s agentic capabilities, positions it well for future growth and success. However, elongated deal cycles and procurement scrutiny around AI solutions are creating near-term headwinds.
Analysts tracking DCBO stock forecast adjusted earnings to grow from US$217 million in 2024 to US$658 million in 2029. Comparatively, free cash flow is forecast to improve from US$28 million to US$157 million in this period.
If the TSX tech stock is priced at 20 times forward free cash flow (FCF), it could surge by around 100% over the next four years.
Is this TSX tech stock a good buy?
Valued at $136 million by market cap, Thinkific Labs (TSX:THNC) stock is down almost 90% from all-time highs. Thinkific enables entrepreneurs and established businesses to create, market, sell, and deliver online courses and other learning products.
Thinkific delivered solid Q1 results, with revenue of $17.8 million (up 12% year-over-year), slightly exceeding guidance, driven by strong growth in subscription revenue. Annual recurring revenue (ARR) increased $1.8 million sequentially to $60.1 million, although management expects normalization, as some Q1 gains were one-time benefits from switching to a trial-based model and seasonal holiday promotions.
The company’s strategic pivot toward larger, more sophisticated customers is showing early promise. Thinkific Plus achieved a record number of new bookings, with improved deal sizes, contract lengths, and win rates, growing 27% year-over-year.
However, Plus experienced higher downgrades as some customers reverted to Self-Serve plans, indicating the need for better customer targeting and qualification.
Commerce revenue surged 52% year-over-year to $3.3 million, with penetration rates reaching 56% of gross merchandise volume (GMV). The company maintains strong unit economics, with 74% gross margins and a positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $922,000.
The Canadian penny stock expects continued investments in AI-powered features and enhanced commerce capabilities to drive future growth. While transformation creates near-term volatility, the focus on higher-value customers and improved monetization tools positions Thinkific for sustainable profitable growth.
