We asked our Foolish analysts to name their top tech stocks for our Millennial audience. Here are their choices:
Andrew Button: Docebo Inc.
If you’re looking for an “under the radar” tech pick, you could do worse than Docebo (TSX:DCBO). The company went public for $16 last year and is trading for $38.8 as of this writing.
Why was Docebo’s IPO a success when so many high profile tech IPOs last year were failures?
It comes down to two things: product strategy and financial results.
Docebo’s product strategy involves building AI-powered software to help businesses develop employee training modules. There are plenty of e-learning startups out there, but Docebo offers a unique self-directed approach that helps employees learn better. There’s a lot of demand for this, and Docebo’s offerings are catching on.
This product success has led to financial success. In its most recent quarter, Docebo grew revenue by 57% and had about $700,000 in net income. It’s rare for new tech IPOs to be profitable right out of the gate, so Docebo is showing real promise here.
Fool contributor Andrew Button has no position in any of the stocks mentioned.
Mat Litalien: Lightspeed POS
Lightspeed POS (TSX:LSPD) was one of the hottest IPOs in 2019 and almost doubled in price last year. Unfortunately, the pandemic stunted momentum in a big way. Small-to-midsized businesses (SMB) in the retail and restaurant industries were among the hardest hit. This just so happens to be Lightspeed’s target market.
On the bright side, the company is managing the situation very well and the impact wasn’t as bad as feared. The company posted strong quarterly results in which it proved to be quite nimble and adaptable. It also partnered with Ivanhoe Cambridge, one of the largest asset companies in the country. The deal allows Ivanhoe Cambridge tenants one-year free access to Lightspeed’s integrated, omnichannel sales solution.
The deal should not be overlooked and has the potential to accelerate Lightspeed’s growth plans.
Fool contributor Mat Litalien is long Lightspeed POS.
Ambrose O’Callaghan: Ceridian HCM Holding
My top tech stock for millennials in July 2020 is Ceridian HCM (TSX:CDAY)(NYSE:CDAY). The company operates as a human capital management software company in Canada, the United States, and around the world. Its shares had climbed 69% year-over-year as of close on July 2.
Fortune Business Insights recently forecast that the global human capital management software market would reach $30.55 billion by 2026. This would represent a CAGR of 9.4% during the forecast period from 2018. In Q1 2020, Ceridian achieved Dayforce revenue growth of 27.1% and adjusted EBITDA increased 10.8% from the prior year to $55.2 million.
Ceridian has recently surged into profitability and boasts a solid balance sheet. The company has impressive momentum behind it in a fast-growing space. Millennials should not hesitate to stash this one for the long term.
Fool contributor Ambrose O’Callaghan has no position in any stock mentioned.
Ryan Vanzo: BlackBerry Ltd
If you’re a millennial investor, it doesn’t get much better than BlackBerry (TSX:BB)(NYSE:BB). You may know this tech stock as a smartphone manufacturer, but last year, it didn’t produce a single phone. Today, it’s a pure-play on cybersecurity software.
Cybersecurity has never been more important. Every year, the world adds millions of newly-connected devices. All of these devices need to be protected from hacking. Blackberry makes the software that makes this possible. Its QNX platform, for example, is already installed in 150 million cars worldwide.
Right now, BlackBerry stock trades at 3 times sales. Competitors like Crowdstrike trade at a 500% premium! Once the market catches onto BlackBerry’s new business model, expect that discount to narrow quickly.
Fool contributor Ryan Vanzo has no position in any stocks listed.
Jed Lloren: Shopify
Shopify (TSX:SHOP)(NYSE:SHOP) is my pick for the best TSX stock for millennials to add to their portfolio. Although the company has shown an incredible amount of growth over its time as a publicly-traded company, especially in the past year, we are still in the infancy of e-commerce. Because of this, Shopify still has a lot of potential growth ahead.
One of the biggest beneficiaries of the COVID-19 pandemic, Shopify has seen a large surge of consumers turn to online shopping during the lockdowns. The company has also been in the spotlight recently to announce new partnerships with Facebook and Walmart. Expect future developments from Shopify to be announced as the company continues to find ways to innovate the e-commerce industry.
Fool contributor Jed Lloren owns shares of Facebook and Shopify.
Robin Brown: Descartes Systems Inc.
Although Descartes Systems (TSX:DSG)(NASDAQ:DSGX) is a pricey stock today, it is perfect for investors with a long investment horizon. It is a leading provider of logistics/supply-chain software, networks, and digital solutions. As global trade increasingly becomes complex, Descartes stands to benefit from a wave of customers seeking to digitize and optimize their logistics platforms.
Descartes produces very predictable revenues (89% are reoccurring) and accretes significant free cash flow. It has a $46 million net cash position, which it will likely deploy into accretive acquisitions this year. Between acquisitions and organic growth, management targets 10-15% adjusted EBITDA growth per year. Compound that over a lifetime and it makes for a pretty sweet Canadian tech stock to own.
Fool contributor Robin Brown owns shares of DESCARTES SYS.
Stephanie Bedard-Chateauneuf: Real Matters
Real Matters (TSX:REAL), a provider of network services for the mortgage and insurance industries, is my top TSX tech stock for Millennials.
The bulk of Real Matters’ revenues comes from the U.S. mortgage industry. The cloud-based real estate platform benefits from tailwinds in refinance and home purchases volumes in the current context of low rates.
The combination of low rates, higher volumes, and market share gains gives Real Matters a great risk-reward profile. Revenue is expected to rise by 44% in 2020, while earnings are estimated to grow by 117%.
With a five-year PEG of 0.65, Real Matters’ stock is cheap given its growth profile.
Fool contributor Stephanie Bedard-Chateauneuf owns no position in any stock mentioned.
Demetris Afxentiou: Open Text Corp
Open Text (TSX:OTEX)(NASDAQ:OTEX) is a tech stock stacked with potential. For those unfamiliar with the company, Open Text offers a suite of Enterprise Information Management (EIM) solutions. Those solutions help businesses manage content and data.
In case you haven’t realized it, data is really big business, and Open Text is an established leader in that field. Open Text currently boasts over 100,000 customers that include large businesses and governments alike. The company operates a lucrative subscription model that generates over 75% of its sales and has renewal rates of over 90%. This factor alone makes Open Text an attractive option, but there’s more.
Open Text continues to grow its business. The company has expanded its software suite considerably over the years, thanks to an aggressive stance towards acquisitions. By way of example, the company completed four acquisitions in the past two years alone.
That potential is enhanced further by Open Text’s dividend. Open Text currently pays out a modest 1.63% yield, but the dividend has seen annual or better bumps going back several years. Throw in a solid recurring revenue model and you have a great long-term option for nearly any portfolio.
Fool contributor Demetris Afxentiou has no position in any stocks mentioned.
Joey Frenette: Tucows
My top millennial tech pick for the month is Tucows (TSX:TC)(NASDAQ:TCX), an IT and telecom company that’s a strange blend of stable cash-flow-generative low-growth businesses (domain) alongside capital-intensive high-growth businesses (telecom). Tucows is also probably the most boring tech play on this list!
The company has endured its fair share of headwinds over the years. And the coronavirus pandemic isn’t helping its cause. With a relatively resilient business, a compelling growth runway for its telecom business, and a valuation that’s too good to pass up at these levels (the stock trades at a mere 1.8 times sales), I think value investors ought to consider taking a position in the boring, but beautiful tech stock today.
As Tucows, though Ting Mobile, looks to capture a larger, albeit still relatively small, slice of the U.S. telecom pie with the introduction of new telecom tech to select cities and towns, I don’t think TC stock will remain stuck in limbo for very long.
Fool contributor Joey Frenette has no position in any stocks mentioned.
Puja Tayal: Celestica
Celestica (TSX:CLS)(NYSE:CLS) provides end-to-end electronics manufacturing services from design and engineering to manufacturing, assembly, testing, system integration, fulfillment, and after-sales service. The company earns 39% of its revenue by manufacturing high-margin Advanced Technology Solutions and 40% from low-margin Cloud and Connectivity Solutions. It serves cloud-based companies, original equipment manufacturers, and companies on healthcare industrial, aerospace, and defense. Its top customers include Cisco and IBM.
Last year, the U.S.-China trade war slowed growth for the entire semiconductor industry. Celestica stock fell 11% in 2019 as it earns 70% of its revenue from China. The COVID-19 lockdown disrupted electronics manufacturing, which sent Celestica stock further down 60% in March. However, digitization is driving demand for the data center. Celestica stock has surged 124% from its March low and is currently trading at $9.22. The recovery in electronics demand could drive the stock to its 2018 level of above $15, representing a 60% upside potential.
Fool contributor Puja Tayal has no position in the companies mentioned.
Sneha Nahata: Enghouse Systems
Enghouse Systems (TSX:ENGH) stock grew significantly this year as COVID-19 is proving to be a tailwind for the company. Enghouse’s software and solutions support remote work and customer interaction, the demand for which remains high. As the world deals with the pandemic, remote work is likely to be the new normal, creating significant growth opportunities for the company in the long run.
While its underlying business remains strong, Enghouse boosts its growth further through acquisitions. The company has a strong track record of acquiring businesses that expand its product suite and drive profitable growth. Its recent acquisitions of Vidyo and Dialogic are generating stellar revenues and are contributing meaningfully to its profit margins.
Sustained demand, expansion of its product suite, and acquisitions should continue to drive double-digit growth in its top and bottom line. Besides, its dividends grew at a CAGR of 16% since 2015, making it a perfect stock for investors seeking both growth and income.
Fool contributor Sneha Nahata has no position in any of the stocks mentioned.
Vineet Kulkarni: Constellation Software
Constellation Software (TSX:CSU) stock has soared more than 3,500% in the last decade. The stock is currently trading close to its all-time highs and looks expensive from the valuation perspective.
However, I think the stock will continue its uptrend driven by rewarding acquisitions and solid earnings growth. A $32 billion company acquires smaller software companies with a leadership position in niche markets and offers mission-critical solutions.
Its client base includes commercial businesses as well as government and related parties. Constellation’s software is hard to replicate, which bodes well for longer-term customer relationships.
Constellation’s strong earnings growth potential and unique business model make it stand tall among peers and justifies premium valuation.
Fool contributor Vineet Kulkarni does not have any positions in the stocks mentioned.
Vishesh Raisinghani: Absolute Software
Just like any other millennial in his late-20’s, what matters to me most is wealth creation. In my opinion, the best way to create wealth is to invest in a company that’s at the epicenter of a wave of relentless demand. Absolute Software (TSX:ABT) fits that bill perfectly. The company provides endpoint security software that allows corporations to secure a range of consumer devices, from smartphones to laptops. In the work-from-home era, this service is as critical as ever.
I believe Absolute’s platform will be adopted by more corporations of all sizes in the years ahead. Meanwhile, the stock is trading at 30 times cash flow per share and offers a 2.3% dividend yield. An attractively priced growth opportunity.
Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.
Nicholas Dobroruka: Kinaxis
My top TSX tech stock for millennials for the month of July is Kinaxis (TSX:KXS). The $5 billion company specializes in providing cloud-based software to supply-chain operations. Perhaps not the most exciting industry to pique the interest of a millennial, but the long-term growth potential should help generate some excitement. Year to date, the stock is already up more than 80% while the S&P/TSX Composite Index is down by 10%. With half the year still left, it’s very possible this stock will see it’s price double by the end of the year.
A major reason for the surge in performance this year has been due to an increase in demand for the company’s products and services. As consumer purchasing behaviour has been dramatically altered by the effects of the COVID-19 pandemic, companies’ supply-chain operations have had their hands full trying to keep up.
This tech company might not be a household name among Canadian millennials, but there is plenty of growth still ahead for investors to be very bullish about.
Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned.
Karen Thomas: Evertz Technologies Ltd.
Evertz Technologies (TSX:ET) is a little-known quality tech stock that has a strong history of shareholder value creation. Evertz designs, manufactures, and markets video and audio infrastructure solutions for the broadcasting industry. It is a business that has both consistent and reliable results, as well as good growth ahead.
The broadcast equipment market is experiencing a secular shift that is being fueled by the following factors: The transition from analog to digital, growing demand worldwide for HDTV, government mandate for digital, and the fact that broadcasters are in the process of building their infrastructure.
And the company’s growth profile has recently been accelerated in this pandemic, with increases in video streaming driving additional demand.
Evertz consistently generates high returns on equity, strong free cash flows, and a healthy balance sheet. These factors make it a solid investment for millennials looking for growth as well as safety and income. Evertz is currently yielding 3%, and in the past, the company has chosen to return excess cash to its shareholders in the form of special dividends.
Fool contributor Karen Thomas does not own shares of Evertz Technologies Ltd.
Kay Ng: CGI Group
Millennial investors should seek to park a good portion of their money in the tech space to defend against a COVID-19-shaken economy and for long-term growth.
My top tech stock pick for July is CGI (TSX:GIB.A)(NYSE:GIB). As a company that offers end-to-end services and solutions globally, it helps clients maximize their technology strategies. Therefore, the stock is not only resilient but likely grow through this economic downturn.
CGI has a track record of double-digit growth. Since the tech stock has fallen about 21% year to date, it trades at a reasonable valuation for investors seeking long-term growth in a blue-chip name that has stable earnings power.
Fool contributor Kay Ng does not own shares of CGI.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. David Gardner owns shares of Facebook. Tom Gardner owns shares of Facebook, Shopify, and Tucows. The Motley Fool owns shares of and recommends Constellation Software, Facebook, Shopify, Shopify, Tucows, and TUCOWS INC. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends BlackBerry, BlackBerry, CGI GROUP INC CL A SV, Enghouse Systems Ltd., KINAXIS INC, Open Text, and OPEN TEXT CORP.