2 High-Growth TSX Stocks That Are up 130% This Year: Should You Buy?

Some TSX stocks have stood notably strong and absolutely thrashed broader markets this year. Here are two of those names.

| More on:
Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept

Image source: Getty Images

Undoubtedly, Canadian markets have shown an epic recovery from the pandemic lows of last year. Broader markets are up approximately 55% since March 2020 and still look in great shape. Interestingly, some TSX stocks have stood notably strong and absolutely thrashed broader markets. Here are two of those names. Is there any steam left in these two or will the rally dry up soon? Let’s see.

goeasy

Consumer lender goeasy (TSX:GSY) saw a massive recovery since last year. It has been firing on all cylinders with handsome financial growth. GSY stock is currently trading at its all-time highs and is up more than 130% this year.

The $3.5 billion goeasy primarily lends to non-prime borrowers that Big Six Canadian banks do not cater to. Its lending segment offers various loan products ranging from $500 to $45,000 with repayment terms of nine months to 10 years.

Recently, goeasy saw steep growth in loan originations that drove its top-line growth. Importantly, it saw a notable improvement in loan repayment trends, as the world started moving towards the end of the pandemic. In addition, more improvement in the employment scenario will likely further drive its business, ultimately helping its bottom line.

The company has seen consistent operational and financial growth in the last two decades. Since 2001, GSY stock has returned almost 10,000%, beating peer TSX stocks by a wide margin.

Driven by the strong recovery recently, goeasy management increased earnings guidance for the next three years. The stock looks hugely undervalued at the moment, considering the bullish guidance through 2023. Thus, I expect a massive run-up in goeasy stock for the next 12 months, driven by expected higher demand amid economic recovery and strong earnings growth.

Nuvei

Canada’s top fintech stock Nuvei (TSX:NVEI) has been really unstoppable this year. Besides robust quarterly earnings growth, several accretive acquisitions fueled Nuvei’s performance this year. As a result, the stock has soared 130% this year, outperforming peer high-growth stocks.

This week, Nuvei announced an acquisition of a Latin payment solution provider Paymentez. Along with payment gateways, Paymentez supports high-growth verticals like online games and delivery platforms.

It gives connectivity to 11 Latin American countries that support 80 local payment methods. After Mazooma and Simplex, another important acquisition of Paymetez will drive Nuvei’s top-line growth.

Nuvei reported US$328 million in revenues in the first half of 2021. That’s a steep 85% growth year over year. Notably, it could continue superior top-line growth given the recent accretive acquisitions and robust contribution from e-commerce spending. During the same period, Nuvei posted earnings of US$67 million against a loss in the first half of 2020.

Nuvei stands tall from its fintech peers owing to its single integrated platform that helps merchants accept more forms of payments in more currencies and in more markets.

Importantly, NVEI stock is stretched from the valuation standpoint after such a steep rally. Tech stocks generally trade at a heavy valuation premium. However, Nuvei’s premium indicates a limited upside potential from its current levels.

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 recommends Nuvei Corporation. Fool contributor Vineet Kulkarni has no position in the companies mentioned.

More on Tech Stocks

work from home
Tech Stocks

Could Lightspeed Stock Be a Big Winner in 2023?

Investors can capitalize on Lightspeed’s low valuation and benefit from the recovery in its price.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Tech Stocks

TFSA Passive Income: How I’m Investing to Make $2,000/Year From Dividends

I am increasing my dividend income by investing in dividend stocks like the Toronto-Dominion Bank.

Read more »

Electric car being charged
Tech Stocks

Is Now The Time to Buy EV Stocks?

EV stocks may be down now, but don't count them out. They'll soon be back up again, so now may…

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

Better Buy: Amazon vs. Apple Stock

While both Amazon and Apple have bright long-term prospects, Apple stock looks like the best tech company to invest in…

Read more »

A stock price graph showing declines
Tech Stocks

Has Blackberry Stock Finally Stopped the Slide?

Blackberry has not yet delivered the kind of financial results that we know it can, but this is about to…

Read more »

Car, EV, electric vehicle
Tech Stocks

Chinese Stocks are Soaring: This TSX Stock Could Gain

Magna International stock could benefit from China's economic re-opening.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

1 Oversold Growth Stock to Buy for Major Returns in 2023

This growth stock could be the best Canadian stock to buy now for 2023, with shares possibly doubling back to…

Read more »

Hands holding trophy cup on sky background
Tech Stocks

Could BlackBerry Stock Be a Big Winner in 2023?

BlackBerry (TSX:BB) stock more than halved last year amid the tech stock selloff. Could 2023 be a winning year for…

Read more »