The January Reset: 2 Beaten-Down TSX Stocks That Could Stage a Comeback

January is basically reset season. The credit-card bill is real, the calendar feels clean, and it’s motivating to tidy up the Tax-Free Savings Account (TFSA) and make investing simpler. A smart reset is not chasing whatever is loud. It’s looking for businesses that got humbled, but still have a real engine. That way, an ordinary year can look like a comeback year. So let’s look at two that are far overdue.

SHOP

Shopify (TSX:SHOP) can feel like the classic “I missed it” stock. Yet it also has the kind of volatility that keeps handing patient investors second chances. In its third quarter of 2025, Shopify stock said revenue grew 32% year over year and gross merchant value (GMV) also rose 32%. Meanwhile, free cash flow margin hit 18%. It also emphasized that this was the ninth straight quarter with double-digit free cash flow margins. This is a big credibility builder for a company that used to be judged mainly on growth.

So why did the shares wobble even with a strong quarter? The market is forward-looking and Shopify stock is priced on what it can do next, not what it just did. For Q4 2025, the company guided to revenue growing at a mid-to-high-twenties rate, with gross profit dollars growing at a low-to-mid-twenties rate, operating expenses around 30% to 31% of revenue, and free cash flow margin slightly above Q3. That’s still healthy, but it can read like a deceleration if investors were expecting another blowout right away. Furthermore, it invites debate about whether growth is normalizing.

For beginners, the key valuation idea is simple. Shopify stock usually trades like a premium growth business, so it can punish investors for even small disappointments. That’s the trade-off for owning a company that is still building core infrastructure for merchants and brands. If you buy it as a January comeback pick, the smarter approach is to size it modestly, expect bumps, and let the business prove itself across a few quarters, not a few trading days.

SU

Suncor Energy (TSX:SU) is a different kind of beaten-up name. It’s a cash-generation business when oil prices and refining margins cooperate and tends to look boring until dividends and buybacks start doing the heavy lifting. In November 2025, Suncor announced a dividend increase, which was great news for investors subjected to the cut a few years back. Furthermore, it’s a sign management believes the base business can support a bigger, steadier payout heading into 2026.

If the Bank of Canada continues cuts, Suncor can benefit in a practical, investor-psychology way. A lower rate backdrop reduces the discount rate applied to future cash flows and often nudges investors back toward cyclical value names. That doesn’t change the price of oil, but it can change what investors are willing to pay for a company that can throw off cash and return it. It can also ease pressure on interest costs over time, which matters for capital-heavy businesses.

On valuation, Suncor typically looks inexpensive next to most Canadian growth favourites. Suncor trades at just 14.6 times earnings at writing, which tells you the market is treating it as cyclical, but not priced for perfection. For income, the pitch is straightforward. You’re paid to wait with a meaningful dividend, and you can get extra torque if buybacks keep shrinking the share count. However, you have to accept that energy profits move with a commodity cycle, and that cycle can turn fast.

Bottom line

If you’re building a beginner-friendly reset portfolio, Shopify stock and Suncor can complement each other. Shopify stock offers a long runway and real operating leverage if digital commerce keeps expanding and management keeps executing. Suncor can act as a cash-return anchor that often benefits when investors rediscover value and cyclicals. For Shopify stock, watch gross margin, expense discipline, and whether merchant solutions keep outgrowing subscriptions. For Suncor, watch production reliability, costs, and how much free cash flow is left after sustaining capital and the dividend. That’s what funds buybacks and keeps the payout safe.

The post The January Reset: 2 Beaten-Down TSX Stocks That Could Stage a Comeback appeared first on The Motley Fool Canada.

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More reading

• Will Shopify’s Uptrend Continue in 2026?
• Suncor Energy: Should You Buy the Dip?
• 3 Unbelievable Buying Opportunities Investors Should Jump on Right Now
• 3 TSX Stocks That Could Triple in 5 Years 
• My 3 Best TSX Value Stock Ideas Going Into 2026

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.