While many Canadian stocks have enjoyed a huge windfall from strong TSX performance in 2025 has taken a hit to many major Canadian growth stocks. Many investors have taken a more speculative stance on mining and artificial intelligence (AI) stocks. Boring, stable compounders have been left in the dust.
If you don’t mind being a little contrarian, there are some great long-term buying opportunities. Some of these stocks have fallen sharply, so you may want to use the average dollar rate as you build a position. Likewise, starting a position can take some determination. However, it could pay off if these stocks prove their resilience over time.
A Canadian software stock to buy on the pullback
Topicus.com (TSXV:TOI) has been ravaged over the past six months. This Canadian stock is down 46% over the past six months and 23% over the past year.
When you see these returns, you might think there is something wrong with the business. However, that is simply not true. Year-to-date 2025, revenues increased 20% and free cash flow increased 19%. That was before it really started enjoying the benefits of a major investment in Asseco, a Polish software conglomerate.
The reality is that software stocks have been rejected by the market due to concerns about AI disruption. While AI is a concern to keep an eye on, companies like Topicus could benefit from it. AI could enable the company to build better solutions for its niche customer base. Likewise, AI can improve the applications it can offer to customers.
Topicus is trading near its lowest valuation since its 2021 IPO. For a company that has been growing operating cash flow at a compound annual growth rate (CAGR) of 23%, this seems like an attractive buying opportunity.
A fintech share with a growing dividend
PRopel Holdings (TSX:PRL) is a bit more speculative. However, this Canadian stock could pay off some big gains in the coming years. The stock is down 33% in the past six months and 40% in the past year.
But if you don’t mind that a stock can be a bit volatile, the pullback could be an opportunity. Propel provides consumer loans to the subprime market. These are riskier customers. However, it spreads its risk through smart underwriting through its AI platform, offering only small loans and requiring higher interest rates.
Propel has grown profitably at a CAGR of more than 40%. Even if growth were to moderate to between 20% and 30%, you would only pay a price-to-earnings ratio (P/E) of nine. This Canadian stock also pays a nice 3.5% dividend yield (which grows regularly), so you’re getting paid to wait for the share price to recover.
A Canadian engineering stock with years of growth ahead
A boring professional services company Stantec (TSX:STN) may not be the typical stock you would consider a growth stock. Yet this Canadian stock is up 24% in the past year and 170% in the past five years.
Stantec is a leading Canadian provider of engineering, architecture and environmental services. Over the past three years, revenue has grown at a CAGR of 11% and earnings per share at a CAGR of 35%.
Any time you see earnings growth faster than revenue, it shows that the company is benefiting from economies of scale and operating leverage. This is a well-managed business with major long-term headwinds such as renewal of aging infrastructure, urbanization, grid electrification/modernization, and AI/data capacity expansion.
Stantec shares are down 12% in the past 90 days. This Canadian stock could be a solid buy if you have a long-term, buy-and-hold investment strategy.
#Canadian #Growth #Stocks #February