The Motley Fool

Fearless Forecast: 2 Tech Stocks Could Climb to the Top in 2020

All eyes are on the Toronto Stock Exchange (TSX) now that market strategists are painting a rosy picture. The index might set new records in 2020. Their crystal balls are saying the financial stocks will do better, but the leaders will come from the technology sector.

The fearless forecast is that technology developments will continue, and the sector is unlikely to experience a slump. If the predictions should come true, then you must keep a close watch on Real Matters (TSX:REAL) and Lightspeed (TSX:LSPD).

Hottest stock in 2019

Real Matters might do a repeat performance in 2020 after a stunning showing last year. This $1.12 billion network management company was the best-performing tech stock. From $3.30 on December 31, 2018, Real Matters finished 2019 at $12.32 or a jump of 273.33%.

The question today is whether this company that provides network services for the mortgage and insurance industries can maintain the same pace of growth. Last year, it beat the top and bottom-line estimates in all quarters. As a result of the exponential gain, Real’s market cap ballooned to $1 billion.

Over the next five years, the annual growth estimate is 56.8%. With the high rate, REAL should count as among the TSX’s best growth stocks.

Investors are eagerly awaiting the company’s Q1fiscal 2020 financial results on January 30, 2019. If Real reports another impressive quarterly result, the uptrend should continue.

Homerun

Lightspeed was the largest tech IPO in nine years when it went public on March 8, 2019. As investors were starving for tech stocks, the company was able to $179 million on its market debut. From $18.90 closing price on opening day, Lightspeed finished 2019 at $36.07 or 90.85% higher.

Next to Shopify, this $3.84 billion tech firm that specializes in point of sale (POS) cloud solutions with the highest expected growth rates in the technology sector.

The patrons or users of the POS cloud solutions are small businesses that are predominantly restaurants. With many potential clients for tapping, there’s plenty of room for growth.

This year, the growth estimate is 92.6%, although analysts covering the stock expect earnings to grow by an average of 75% over the next few years. Lightspeed is aggressively pursuing growth through acquisitions. Management believes the strategy should drive growth.

At present, Lightspeed is cash-rich with no considerable debt, and has yet to draw from its available credit line. More and more small and medium-sized businesses in over 100 countries are using the company’s cloud-based commerce platform. Its all-in-one solution is helping restaurants and retailers to grow or expand the business.

The next quarterly earnings report on February 6, 2020, is also highly anticipated.

Strong growth potentials

The lives of people are changing with the many technological advances. Real Matters facilitate transactions in the mortgage and insurance industry while Lightspeed assists businesses worldwide to operate smoothly.

Also, tech stocks in Canada are few but companies with massive growth potentials are in the tech sector. You can choose either stock. Any of the two could ultimately be the best performer in 2020.

This Tiny TSX Stock Could Be the Next Shopify

One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!

Click here to discover how!

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.