The market is trading at record highs. Many TSX stocks are also trading at or near record highs. But don’t let this fool you into thinking there is only so much benefit to be had. These are exciting times for investors and there are still plenty of opportunities in the market.
One of the best TSX stocks Canadians can buy today is Well Health Technologies Corp. (TSX: GOOD). It’s a small cap stock that has grown tremendously. Let’s take a look at these rising Canadian tech stocks.
Rapid growth
In the five years ending in 2024, Well Health Technologies has grown at a rapid pace. Sales increased by more than 1,700% to $919 million. And net income rose from a loss of nearly $4 million to $32 million. Finally, earnings per share (EPS) rose to $0.13, up from 2020 net losses.
In Well Health’s third quarter, the company continued to experience rapid growth. Revenue rose 56% to $365 million and adjusted earnings per share came in at $0.06, compared to a loss of $0.33 in the same period in 2024. This improvement was driven by both organic and acquisition growth as well as operational improvements, which are driving margins higher. For example, Well Health’s gross margin increased by 510 basis points to 45.5%.
Positive cash flows
In addition to revenues, I think it’s a useful exercise to look at cash flows. Over the past three quarters, Well Health reported positive cash flows. In the third quarter, Well Health’s free cash flow was $31.2 million. This is not a given for companies that are in the rapid growth phase, so it is a good sign.
And the company uses some of this cash flow to give back to shareholders. At the end of the third quarter, Well Health had repurchased approximately 297,000 shares in 2025. Management has addressed shareholder dilution in this way, and it’s a good sign that the company is trying to be shareholder friendly.
What about Well Health stock?
Today, Well Health’s stock price remains stuck below $5. As you can see in the chart below, the stock has really languished in recent years.
In terms of valuation, Well Health shares trade at just nine times this year’s estimated earnings. This is quite cheap, especially considering the growth that Well Health is experiencing.
But I would explain this low valuation and dismal recent share price performance by pointing out that Well Health is still in the early stages of its growth. This has many consequences. The first is that Well Health is spending a lot of money to achieve growth. While this is typical for a company at this early stage of its growth path, it poses a risk to investors.
So financing Well Health’s rapid growth in the coming years is something that will likely weigh on the stock. And that includes the company’s plan to divest certain lower-return assets and pour everything into its Canadian operations. As you can see, it’s a complicated story, with many moving parts. This entails additional risks for the company. In my opinion, these are the things holding the stock price back.
But that said, I think all of this makes Well Health stock a very attractive buy for investors right now. When the market does not recognize the value of a company, it presents us with a good opportunity.
The bottom line
Well Health Technologies stock is presented as one of the best TSX stocks to buy. As the company continues its aggressive growth plan, I believe investors who jump in now will be very handsomely rewarded.
#TSX #stocks #Canadians #buy