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The S&P/TSX Composite Index has shown resilience by climbing 6.7% from this month’s lows, supported by easing inflation concerns. The index is now trading in positive territory for the month and is only 0.4% below its all-time high. Despite this upward trend, some stocks have declined significantly from their 52-week highs. The following three stocks have experienced substantial losses, yet they present Value stock prospects within their respective sectors.
Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD), a technology sector company providing commerce solutions to businesses globally, reported strong first-quarter earnings for fiscal 2025. The company’s revenue increased by 27% to US$266.1 million, driven by growth in transaction and subscription revenues. Key customer wins and a rise in the average revenue per user from US$383 to US$502 contributed to this performance.
Lightspeed's financial results also benefitted from cost-cutting measures, including a 10% reduction in headcount, leading to an adjusted EBITDA of US$10.2 million compared to a loss of US$7 million in the same quarter last year. The company's management has maintained its revenue growth guidance of at least 20% for the current fiscal year and has raised its adjusted EBITDA guidance by US$5 million to US$45 million.
Despite this solid performance, Lightspeed's stock is trading 35.5% lower than its 52-week high. The company’s next 12 months (NTM) price-to-sales ratio stands at 1.8, reflecting an attractive valuation.
Cargojet
Cargojet (TSX:CJT), a key player in the transportation sector, specializes in overnight air cargo services to major Canadian cities and operates scheduled and ad-hoc international routes. The company recently reported its second-quarter earnings, with revenue and adjusted EBITDA increasing by 10.1% and 6.5%, respectively. Strong cash flow enabled Cargojet to repay $102 million of debt this year, reducing its leverage ratio (net debt-to-adjusted EBITDA) from 2.6 to 2.3.
In June, Cargojet entered into a three-year agreement with a Chinese e-commerce company to provide scheduled charter services between China and Canada, which could generate $160 million in revenue over three years. The company is also converting two B767 passenger planes into freighters, with completion expected in early to mid-2025.
Despite these positive developments, Cargojet's stock is down 14% from its 52-week high. The stock is currently trading at 1.9 times projected sales for the next four quarters, indicating a favorable valuation.
Telus
Telus (TSX:T), a significant player in the telecommunications sector, has faced pressure over the last two years due to unfavorable policy changes and rising interest rates. However, with the Bank of Canada recently cutting interest rates twice, there is renewed interest in the sector. Telus has lost significant value from its 2022 highs and is currently trading at an NTM price-to-sales multiple of 1.6.
The ongoing digitization of business processes is driving demand for high-speed internet services. Telus, with its strong 5G and broadband infrastructure and attractive bundled offerings, continues to expand its customer base. The company added a record 332,000 customers in the quarter ending in June, with a low churn rate of 0.9% in the postpaid mobile segment.
Telus has increased its dividend 26 times since May 2011, returning around $21 billion to shareholders. The company’s management aims to grow dividends at an annualized rate of 7-10% through 2025.
