1 Obscure TSX Stock That Could Deliver a 100% Return on Investment

How would you like a 100% return on investment? Invest in the AcuityAds stock now before the price soars in 2021. The obscure tech stock’s growth potentials are enormous compared to TSX’s largest publicly-listed company.

| More on:
Where to Invest?

Image source: Getty Images

An obscure technology stock is upstaging TSX’s tech giant in 2021. Its trailing one-year price return is 430.20% versus Shopify’s 36.04%. Based on analysts’ forecasts, AcuityAds Holdings (TSX:AT)(NASDAQ:ATY) could deliver 99.81% or a nearly 100% return on investment. The current share price of $10.71 could soar to $21.40 in the next 12 months.

Business overview

AcuityAds provides targeted digital advertising solutions powered or backed by machine learning technology. The solutions aim to help marketers advertise effectively and succeed in today’s omnichannel ecosystem. Planning, buying, and real-time intelligence from one platform is what Illumin™, its journey automation technology, brings to the table.

The proprietary Artificial Intelligence of this $645.84 million company boasts unique programmatic capabilities to narrow the gap between advertising planning and execution. Advertisers will have control, minimize waste, and, more importantly, deliver the right message to consumers.

A trillion-dollar industry

According to adexchanger.com, the advertising industry has turned the corner due to the uncertainty brought by the global pandemic. It estimates advertising revenue in the U.S. alone to increase by 22% to US$279 this year. Digital advertising revenue, in particular, should grow quicker or around 33% in 2021.

Currently, digital ads account for 57% of all advertising in the United States. The latest estimate is that total ad revenue will grow to US$388 billion by 2026. AcuityAds CEO and co-founder Tal Hayek believe the ad industry will top a trillion dollars by 2027. He adds that programmatic will fuel exponential growth.

Management has concrete plans to drive growth. The primary focus is U.S. expansion. Hayek said that AcuityAds wants to capture a significant share of ad dollars flowing to Connected TV. The company will likewise transition to self-service via its Illumin.

The CEO said “black box” buying is a thing of the past. It has been replaced by a real-time platform that focuses on the customer journey.  AcuityAds graduated to the TSX in 2019 and was then listed on the NASDAQ in June 2021. Hayek also reveals that Home Depot and Weight Watchers are among its high-profile clients.

Impressive financial performance

AcuityAds’ total revenue in Q1 2021 (three months ended March 31, 2021) grew 13.4% to $27.5 million year over year. However, the quarter’s highlight was the 566% increase in net income versus Q1 2020. Meanwhile, total connected TV segment revenue posted approximately 987% growth. For  Illumin, revenue rose more than 100%, sequentially.

Tal Hayek said, “Complementing our revenue growth, we also continued to generate strong cash flow and strengthened our balance sheet in the quarter. As we look to the second quarter, we expect revenue to accelerate ahead of pre-pandemic levels, growing over 50% on a year-over-year basis.”

According to CFO Jonathan Pollack, the company has an even stronger balance sheet after its cash grew to a record $27 million and working capital climbed over $30 million. Pollack adds that the NASDAQ listing should broaden the investor base and enhance the brand image of AquityAds.

Altering the advertising landscape

AcuityAds is confident that Illumin will fundamentally alter the programmatic advertising landscape. Now is an excellent time to invest in this growth stock. The price has fallen to $10.71, a 25% discount year to date. Shopify and other popular tech names won’t deliver massive gains like this obscure AI stock.

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.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AcuityAds Holdings Inc. and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

stock analysis
Tech Stocks

Investing in AI: 1 Cheap Tech Stock Poised for Growth

Docebo is a little-known Canadian tech firm that's unlocking the power of next-generation AI technologies.

Read more »

Businessman holding AI cloud
Tech Stocks

5 Tech Stocks You Can Buy and Hold for the Next Decade

Don't make the mistake of thinking all tech stocks are alike. These five have a strong future both behind and…

Read more »

funds, money, nest egg
Tech Stocks

TFSA Investors: 2 TSX Stocks for a Legit Shot at $1 Million in 20 Years

Undervalued TSX tech stocks such as Neighbourly Pharmacy can help investors to turn a $100,000 investment into $1 million in…

Read more »

Dividend Stocks

TFSA: 3 Value Stocks to Buy in April

The March dip is a synopsis of the mild recession banks anticipate as high interest rates trickles down. It is…

Read more »

Growing plant shoots on coins
Tech Stocks

Got $5,000? These Are 2 of the Best Growth Stocks to Buy Right Now

If you've got $5,000 to invest, buying growth stocks like Lightspeed Commerce and Microsoft is a smart decision.

Read more »

edit Colleagues chat over ketchup chips
Tech Stocks

2 Easy TSX Stocks for Beginners in April 2023

You don’t need to think twice about loading up on these two Canadian stocks in April.

Read more »

calculate and analyze stock
Tech Stocks

Growth Stocks: A Once-in-a-Decade Opportunity to Get Rich

Growth stocks are generally cheap now. So, this year is a good opportunity to shop for growth stocks, perhaps through…

Read more »

grow money, wealth build
Tech Stocks

$10,000 Invested in These Growth Stocks Could Make You a Fortune Over the Next 10 Years

Growth stocks such as Dollarama and Chewy are well poised to deliver outsized gains to long-term investors.

Read more »