3 TSX Stocks That Can Double Your Money in the Next Three Years

Given their large addressable market and expanding market share, these three TSX stocks can double your money in the next three years.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The progress in the development of a vaccine against COVID-19 has led the S&P/TSX Composite Index to rise 8.4% higher for this month. Amid the increased investor confidence, here are the three TSX stocks that can double your investments in the next three years, given their large addressable markets and expanding market share.

Docebo

Docebo (TSX:DCBO), which provides a cloud-based enterprise learning platform for enterprises, is up over 235% for this year. With more people preferring to work from their homes amid the pandemic, the demand for the company’s services has increased.

In the recently announced third-quarter earnings, its revenue rose 52%, driven by both an increased number of customers and a higher average contract value. At the end of the quarter, the company had 2,025 customers compared to 1,632 customers at the end of the previous year’s quarter. Its average contract value increased close to 25%. Further, the revenue contribution from its recurring sources increased to 93.8%, which is encouraging.

Docebo’s gross profit margins improved 200 basis points to 82.1%, while its adjusted EBITDA came in at $0.6 million compared to a loss of $1.4 million in the previous year’s quarter. It generated positive cash flows of $0.5 million from its operating activities, compared to negative cash flows of $1.9 million in the previous year’s corresponding quarter.

Meanwhile, I expect the demand for Docebo’s services to thrive in the post-pandemic world, given its highly configurable learning platforms and utilization of artificial intelligence to enhance users’ learning experience.

MarketsandMarkets projects the global learning management system (LMS) market to reach US$25.7 billion by 2025, representing a compound annual growth rate (CAGR) of 14% from US$13.4 billion in 2020. So, given its large addressable market and increasing market share, I am bullish on Docebo.

Real Matters

Amid the low interest rate environment, the refinancing activities has increased, driving the demand for Real Matters’s (TSX:REAL) services, which provides technological solutions for mortgage lenders and insurance companies. In the first three quarters of 2020, its top-line has grown at 54%, while its adjusted EBITDA increased by 236.2%.

The company is adding new customers and expanding its market share through its strong network capabilities and proprietary platforms. It has net added 11 new clients in each title and appraisal division in the first three quarters. The company has 60 of the top 100 mortgage lenders on its client base, which is encouraging.

With the economic indicators still weak, the central banks will not be in a hurry to raise interest rates, which would benefit Real Matters.

By the end of fiscal 2021, Real Matters aims to expand its market share in the U.S. Appraisal segment to 15-20% and the U.S. Title segment to 1-3%. With the management projecting its addressable market to be at US$13 billion, it has significant potential to expand. Given its growing market share and improving margins, I expect Real Matters’s stock price to double in the next three years.

Lightspeed POS

My third pick would be Lightspeed POS (TSX:LSPD)(NYSE:LSPD), which provides omnichannel solutions for retailers and restaurants. Amid the pandemic, many SMBs (small- and medium-scale businesses) moved their businesses online. This shift to digitization has created a long-term growth opportunity for Lightspeed POS.

At the end of the third quarter, the company’s customer base stood at 80,000. Meanwhile, AMI Partners estimates that there are 47 million retailers and restaurants worldwide, which are Lightspeed POS’s potential customers. So, the company has significant scope for expansion.

With cash and cash equivalents of $513.1 million at the end of the quarter, the company is well-positioned to acquire its peers to increase its market share. Earlier this month, Lightspeed POS announced to have signed an agreement to acquire ShopKeep, a cloud commerce platform provider.

Meanwhile, the company is also focusing on developing innovative products to increase its customer base and maximize its revenue per customer. It recently introduced e-commerce for restaurants, order ahead, and Lightspeed subscriptions. So, given its strong growth prospects, I expect the company to deliver multi-fold returns over the long run.

Should you invest $1,000 in Lightspeed right now?

Before you buy stock in Lightspeed, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Lightspeed wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends Real Matters Inc. Fool contributor Rajiv Nanjapla has no position in the companies mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

ways to boost income
Tech Stocks

How I’d Invest $11,500 in Canadian Fintech Stocks to Revolutionize My Finances

Propel Holdings stock's recent dip could be a trading opportunity for long-term financial gains. Here's why the fintech stock is…

Read more »

Start line on the highway
Tech Stocks

Where I’d Invest $5,000 in Growth Stocks With Long-Term Potential Through 2030

DO you have $5,000 to invest to grow your wealth over the long term? These growth stocks could deliver strong…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

The Only 2 AI Stocks You’ll Need for Long-Term Growth

Here are two top Canadian tech stocks that could help you benefit from surging demand for AI technology and infrastructure.

Read more »