Shares of Shopify (TSX:SHOP)(NYSE:SHOP), Real Matters (TSX:REAL), and Docebo (TSX:DCBO) are on a tear, rising over 100% so far this year. Besides, the rally in these top TSX stocks is far from over, as their strong fundamentals and rising demand provide a foundation for further growth.
Shopify
Shopify stock is rising at a breakneck pace. It has surged about 150% year to date and is up over 215% in one year. The massive rally in Shopify stock is due to the spike in demand for its platform and services. The coronavirus outbreak has led businesses to shift online from offline, driving strong traffic for Shopify.
Shopify’s multi-channel sales platform attracts merchants and provides a solid base for future growth. Its recent deals with Walmart and Facebook could amplify Shopify’s revenues and margins, which is growing at a robust pace. The addition of more sales channels should increase Shopify’s merchant base and drive its high-margin offerings like shipping and capital services.
The e-commerce giant should continue to benefit from the expansion of its product base, multi-channel platform, and higher adoption of its shipping, payments, and capital services. Shopify’s strong fundamentals and favourable industry trend suggest that its stock could continue to generate strong returns for its investors over the long run.
Real Matters
Shares of Real Matters have surged about 115% this year. Meanwhile, it increased by 273% in one year. The extraordinary growth in Real Matters stock is due to the steep rise in the mortgage refinancing activities and dirt-cheap interest rates. Besides, Real Matters also benefits from its ability to expand its market share and the addition of new customers.
The continued growth in coronavirus cases and the fear of the second wave of the virus is keeping interest rates low. Further, the interest rates could continue to remain pressured amid uncertainty. Investors should note that the mortgage rates are dipping below 3%, which should act as a strong tailwind for Real Matters. The low interest rate environment is leading to higher refinance volumes and driving stellar growth in its revenues, margins, and earnings.
The higher volumes and market share gains provide a strong base for future growth and should continue to propel Real Matters stock higher in the coming quarters.
Docebo
Shares of Docebo have jumped about 112% year to date. Meanwhile, it has grown nearly 125% in one year. The company provides software and service that facilitate enterprise learning. The safety measures imposed by the government due to the virus and a gradual transition in the way we work and learn is driving massive demand for Docebo’s offerings.
The software company has been performing pretty well and remains on track to accelerate its growth further. The company’s ability to acquire new customers, strong and growing recurring revenues, and rising average contract value augur well for future growth.
Docebo is eyeing larger deals and focusing on cost efficiencies that should help the company to turn profitable soon.
Despite the massive growth, Docebo stock looks attractive on the valuation front, which implies that there’s further upside in its stock. Docebo trades at a next 12-month EV-to-sales ratio of 3.4, which is lower than the industry average of 4.1.
Docebo’s strong growth potential and low valuation should continue to drive its stock higher.
