Despite the TSX 60 index hovering near record highs, not every stock in Canada is riding the rally. In fact, several quality companies across technology and transportation sectors remain undervalued — presenting a unique opportunity for long-term investors. Here are two discounted Canadian stocks that Bay Street seems to be overlooking this October.
Also Read: Best long term Canadian stocks
Sylogist (TSX:SYZ): A Small-Cap SaaS Gem With Big Potential
Sylogist, valued at a modest market cap of $148 million, delivers mission-critical software-as-a-service (SaaS) solutions for public sector clients across Canada, the U.S., the U.K., and other global markets. The company’s second-quarter (Q2) 2025 results highlight strong progress in its transformation toward a recurring-revenue model. Bookings surged 33% year over year — the second-best in its history — while recurring revenue climbed to 70% of total revenue, up from 62% a year earlier. Annual recurring revenue (ARR) reached $43.8 million, with SaaS ARR rising 12.5% to $31.7 million.
Although Sylogist faced temporary headwinds due to longer decision cycles in the education sector and project timing shifts in municipal markets, management expects these delays to be short-lived, with deferred ARR expected to materialize soon. Encouragingly, the company maintained a robust 107% net revenue retention rate, signaling that existing clients are spending more.
Looking ahead, analysts forecast revenue to grow from $64.4 million in 2025 to $124.4 million by 2029, while free cash flow is projected to rise from $4.5 million to $32.3 million over the same period. At just 10 times forward free cash flow, the stock could more than double within the next four years — making Sylogist a compelling small-cap growth story at an attractive valuation.
Also Read: Canadian stocks to buy 2025
TFI International (TSX:TFII): A Transportation Leader Delivering Efficiency and Growth
With a market capitalization of $10.5 billion, TFI International is one of North America’s largest logistics and transportation companies, serving clients across Canada, the U.S., and Mexico. The company’s Q2 2025 results demonstrated continued operational strength and margin improvement across its business lines. Free cash flow rose 20% year over year to $182 million, while operating income climbed to $170 million, yielding a 9.5% margin — up from 8.5% a year earlier.
Segment-level improvements were equally strong, with less-than-truckload margins expanding 360 basis points and truckload margins up 250 basis points sequentially. These gains reflect TFI’s relentless focus on efficiency, cost control, and strategic integration of past acquisitions. Management also executed disciplined capital deployment, buying back $85 million in shares and paying $39 million in dividends, while refinancing higher-cost debt through a private placement at 4.8% fixed rates.
Analysts expect revenue to increase from $8.12 billion in 2025 to $10.22 billion by 2029, while adjusted earnings per share could more than double from $4.48 to $10.51. Despite trading slightly above its 10-year average at 17.7 times forward earnings, TFI International remains attractively valued relative to its growth outlook. If it maintains its current multiple, the stock could climb by roughly 50% over the next four years — making TFII a strong pick for investors seeking quality at a reasonable price.
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