The selling in high-growth tech stock continues, wiping out a significant portion of their value in a short span. Take Shopify (TSX: SHOP)(NYSE:SHOP) stock as an example. Shares of the e-commerce giant have lost over 26% of its value in one month. Further, it is down over 42% in three months.
Similar to Shopify, Dye & Durham (TSX: DND) and BlackBerry (TSX: BB)(NYSE: BB) stock have also witnessed a pullback over the last month. Further, these stocks have lost a considerable portion of their value from their peak.
While these stocks could remain volatile in the near term, I see this correction in their price as a solid buying opportunity, as their long-term growth story remains intact. Let’s look at a few catalysts that could lead to a steep recovery in these stocks and support my bullish view.
Shopify
Shopify has multiplied its shareholders’ returns since listing on the exchange and has strong growth potential. Though the reopening of the physical retail, supply-chain concerns, and difficult comparisons could lead to moderation in its near-term growth rate, Shopify could continue to expand its market share and deliver strong financial and operating performance in the future years.
The recent correction in its stock price signifies that the headwinds are priced in, thus providing a favourable setup for the future. My bullish outlook on Shopify stock is based on its ability to grow and defend its market share, attract new merchants on its platform, and expand its products and offerings.
I expect Shopify to benefit from its investments in fulfillment networks. Further, increased adoption of its payments solutions, new sales and marketing channels, growing footprint, and diversified subscription solutions revenues bode well for growth. Overall, Shopify’s strong growth prospects and recent decline in price represent a strong buying opportunity.
Dye & Durham
Next up are the shares of the cloud-based software and technology solutions provider Dye & Durham. It has corrected nearly 26% in one month, presenting a good opportunity for long-term investors to accumulate it at current levels.
Dye & Durham is growing rapidly, benefiting from continued strength in the base business and acquisitions. During the most recent quarter, its revenues and adjusted EBITDA increased by 225% and 267%, respectively.
Looking ahead, its geographic expansion, large customer base, broadening of the product suite, and long-term contracts indicate that Dye & Durham could continue to grow at a breakneck pace. Further, acquisitions and a strong balance sheet bode well for growth.
BlackBerry
Like Shopify and Dye & Durham, BlackBerry stock has witnessed a healthy pullback in one month. It is down about 18.5% over the past month, while it has lost nearly 34% of its value in three months. The ongoing migration towards digital and increased cybersecurity incidents provides a multi-year growth opportunity for the company. Further, the recovery in the automotive sector will likely accelerate its growth rate.
Overall, BlackBerry’s focus on product innovation, strength in its cybersecurity and IoT business, and expansion of addressable market bode well for growth. Moreover, strong recurring product software revenue and the continued automation and electrification in the automotive sector should support BlackBerry’s growth rate.
