3 TSX Growth Stocks to Buy in August 2021

Growth stocks such as Lightspeed, Docebo, and Shopify continue to remain top long-term bets for investors.

Man considering whether to sell or buy

Image source: Getty Images.

While the equity indexes continue to trade near record highs, investors might be worried about the steep valuations of high-growth tech stocks that driving the rally. However, investors should also note that it’s impossible to time a market correction and waiting for a pullback makes little sense. It’s better to follow the dollar-cost averaging strategy allowing you to take advantage of market highs and lows.

Keeping these factors in mind, let’s take a look at three TSX growth stocks that should be on your radar for August 2021.

Shopify

The first company on my list is Canada’s largest company in terms of market cap, Shopify (TSX:SHOP)(NYSE:SHOP). This e-commerce heavyweight has been on an absolute tear ever since it went public in 2015 and has returned a monstrous 6,000% in the last six years. This means a $500 investment in Shopify’s initial public offering (IPO) would be worth over $30,000 today.

Shopify increased its second-quarter sales by 57% year over year to US$1.2 billion. Its subscription sales grew 70% to US$334 million, while merchant solutions revenue grew 52% to US$785 million. Its gross merchandise volume stood at US$42.2 billion, indicating a year-over-year increase of 40%. Comparatively, gross payment volume also rose by a healthy 45% to US$20.3 billion. Due to higher operating expenses, Shopify’s operating income growth was comparatively lower at 16% totalling US$236.8 million.

Lightspeed POS

One of the fastest-growing stocks on the TSX, Lightspeed POS (TSX:LSPD)(NYSE:LSPD) is up 515% since its IPO in early 2019. The company delivered stellar quarterly results last week and reported revenue of US$116 million in the fiscal Q1 of 2022 ended in June. Its top-line grew by 220% year over year and approximately 92% of sales were recurring in nature. Comparatively, analysts forecast the company’s sales at US$92.4 million in Q1.

One of the key metrics for LSPD is its average revenue per user that rose 44% year over year to US$230 in the June quarter. The fintech company is successfully expanding its customer base as well as generating higher revenue per customer driven by an increase in payments volume.

However, Lightspeed remains unprofitable as the company reported a net loss of US$49.3 million in Q1. This was more than twice its loss of US$20.1 million in the prior year period. Its adjusted loss stood at US$6.9 million, accounting for 6% of total sales.

Docebo

A remote work enabler, Docebo (TSX:DCBO)(NASDAQ:DOCEBO) is also one of the largest enterprise-facing e-learning platforms in the world. The company has a customer base of 2,300 at the end of Q1 including tech giants such as Amazon Web Services, Hewlett Packard Enterprise, and Thomson Reuters.

In the first quarter of 2021, its recurring sales were up 62% year over year while its gross margins stood at a healthy 82%. Docebo’s total sales have in fact grown from just US$17 million in 2016 to US$63 million in 2020. It also reported a positive cash flow for the first time last year.

A research report has forecast the LMS or learning management solutions vertical to grow at an annual rate of 21% to $30 billion by 2025, giving Docebo enough room to expand its top-line that has generated $71.1 million in sales in the last 12 months.

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Docebo Inc., Lightspeed POS Inc, and Shopify. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

Man considering whether to sell or buy
Tech Stocks

BlackBerry Stock Is Down 20%: Buy the Dip or Call It a Pass?

BlackBerry stock has seen a series of 20% monthly dips since December 2023. Should you buy the dip or call…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Kinaxis: The AI Stock Investors Are Missing Out On

Kinaxis stock (TSX:KXS) is one AI stock you don't want to miss, with proven results and long-term contracts leading to…

Read more »

telehealth stocks
Tech Stocks

Forget Shopify Stock: 1 Tech Stock to Buy Instead

Shopify stock (TSX:SHOP) plunged by over 20% after earnings guidance for the second quarter came in lower, but this other…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Tech Stocks

Down 27% But Not Out: Why Dye & Durham Is a Buy Today

Dye & Durham stock reported a steep fall of 27% in two months. What happened? Should you be worried about…

Read more »

A chip in a circuit board says "AI"
Tech Stocks

These 2 AI Stocks Are Set to Soar in 2024 and Beyond

Here are two of the best AI stocks in Canada that you can buy now and hold for at least…

Read more »

edit Sale sign, value, discount
Dividend Stocks

2 Bargains I’d Buy as They Dip Toward 52-Week Lows

Buying a stock at its 52-week low is a bargain when you are confident this stock will recover sooner or…

Read more »

stocks rising
Dividend Stocks

2 Market-Beating TSX Stocks That Are Still Buys Today

goeasy (TSX:GSY) stock has easily beaten the TSX. Together with Celestica (TSX:CLS), the growth stocks could gain much more value…

Read more »

Growth from coins
Tech Stocks

A Few Years From Now, You’ll Wish You Had Bought This High-Growth Stock

Are you looking for a high-growth stock that can make you a millionaire a few years from now? Then read…

Read more »