2 TSX Growth Stocks That Could Double in 2022

TSX growth stocks are seeing a major decline today. That may be a gift for contrarian investors. Here are two top stocks that could double in 2022.

| 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

Stocks on the TSX have been facing pressure on a broad array of market fears. Whether it be the COVD-19 Omicron variant, rising interest rates, or inflation, the market is clearly not sure where to head next (except perhaps down). Some of Canada’s top growth stocks have been pulling back significantly. Many of them are starting to hit valuations that appear quite attractive.

If the above concerns don’t play out as badly as expected, the stock market could still be set up for a solid rebound in 2022. Some beaten-down Canadian growth stocks could potentially double next year. Two TSX stocks that could have some significant upside next year are Nuvei (TSX:NVEI)(NASDAQ:NVEI) and Sangoma Technologies (TSX:STC).


Over the past month, Nuvei has declined 23%. Certainly, it has had an incredible run in 2021. Despite the pullback, its stock is still up 90% over the past 52 weeks. Today, it has a market capitalization of $17.6 billion.

This TSX stock has had a strong run for good reason. This year, Nuvei has been growing revenues by over 90%. Yet, as it has scaled its payments platform, it has also rapidly grown profits.

Nuvei is currently producing EBITDA margins of over 40%. Management believes it could hit 50% over the longer term. Already, the company generates a lot of cash. To date, its management has been disciplined about acquisitions and it has focused on strong organic growth.

As payments rapidly digitize (including through cryptocurrency), Nuvei’s adaptive platform will be increasingly important to merchants across the globe. Nuvei still has a large market to overtake from here. With a price-to-sales ratio of 21, this TSX stock is not cheap by any means.

There still could be more downside in this pullback. Yet, given the high-quality growth in this business, it should snap back just as quickly when sentiment returns.

Sangoma Technologies: A top TSX small-cap stock

With a market cap of $380 million, Sangoma Technologies is significantly smaller than Nuvei. However, after a steep 20% decline this month, it trades with a price-to-sales ratio of just three and an enterprise value-to-EBITDA ratio of 18.

Sangoma is a leading provider of unified communications-as-a-service solutions to small-to-medium-sized businesses. Early this year, Sangoma acquired a large cloud-focused peer. The acquisition expanded its presence in the U.S., increased recurring revenues, and helped expand margins.

For 2021, this TSX stock delivered 27% revenue growth and 50% adjusted EBITDA growth. In fact, it has been growing annual EBITDA by over 50% for the past five years.

The stock has been on a downward trend ever since it pulled out of a U.S. initial public offering (IPO). Since the start of the year, IPO sentiment has declined, so Sangoma did not believe the offering best served the business today. This doesn’t mean it can’t list in the U.S. another time in the future.

Despite having some of the highest margins in the industry, Sangoma trades at a material discount to its American peers. Most of these peers are not yet profitable or cash flow accretive. It is a far better company than it was a year ago, yet it is trading at a 52-week low. Despite being volatile, this TSX stock could significantly reward patient investors to the upside in 2022.

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 Robin Brown owns shares of Nuvei Corporation and Sangoma Technologies Corporation. The Motley Fool owns shares of and recommends Nuvei Corporation.

More on Tech Stocks

Man holding magnifying glass over a document
Tech Stocks

Watching This 1 Key Metric Could Help You Beat the Stock Market

One key metric that Buffett looks at is the return on equity. Here's why you should watch it.

Read more »

Daffodils in bloom
Tech Stocks

2 Best “Magnificent Seven” Stocks to Buy in April

Two surging mega-cap tech stocks are the best buys among the “Magnificent Seven” this April.

Read more »

clock time
Tech Stocks

Up 47%, Is it Time to Buy Payfare Stock?

Payfare (TSX:PAY) stock has been rising higher in the last six months after dropping significantly since 2021. Is it time…

Read more »

Clock pointing towards a 'sell' signal
Tech Stocks

2 Canadian Growth Stocks to Buy and 1 to Sell

Financial growth stocks like EQB Inc (TSX:EQB) are much cheaper than tech growth stocks.

Read more »

Target. Stand out from the crowd
Tech Stocks

The Most Expensive Stock in Canada Is a Top Buy Today

This stock might be expensive, but it's proven time and again that it's worth its weight in gold. And it's…

Read more »

Upwards momentum
Tech Stocks

CSU Stock: The Best Canadian Growth Stock Pick in Tech?

Constellation Software (TSX:CSU) stock could be in for a bit of dip over the nearer term.

Read more »

Volatile market, stock volatility
Tech Stocks

Nvidia Stock Is Falling Into a ‘Correction.’ Time to Buy the Dip?

Nvidia (NASDAQ:NVDA) has seen shares surge in the last year, but have entered correction territory after dropping over 10% from…

Read more »

Tech Stocks

Is Constellation Software Stock a No-Brainer Buy?

Even the most consistent stocks are not infallible and may be vulnerable against certain conditions. So, it’s worth researching even…

Read more »