Growth stocks are companies that will likely grow their earnings and sales faster than the market average. The Toronto Stock Exchange certainly has a wide range of such options to choose from. However, some are better than others.
Here are three top speculative growth stocks I’ve got my eye on right now.
Top growth stocks: Shopify
Shopify (TSX:SHOP)(NYSE:SHOP) was a stellar Wall Street growth behemoth for several years before the pandemic, as investors looking for ways to play the e-commerce trend. However, growth in the e-commerce sector only accelerated with the pandemic, driving Shopify’s valuation to astronomical levels.
Now, Shopify has done an excellent job of growing into its valuation. Combined with a significant dip of late, this company currently trades at only 26 times earnings. At these levels, the company certainly looks attractive for investors looking for long-term growth. Indeed, this is a stock that traded at a higher price-to-sales multiple just a few years ago.
As e-commerce continues to surge, Shopify remains a top stock investors will want to watch as a long-term buy at these levels.
Lightspeed
Another beaten-up growth stock that’s seen its valuation take a huge hit is Lightspeed (TSX:LSPD)(NYSE:LSPD). Unlike Shopify, Lightspeed isn’t profitable and may take some time to get into the back. Accordingly, with interest rates on the rise, this is a stock many investors don’t want to touch.
That said, the company’s aggressive moves into omnichannel payment platforms for merchants could get a boost from the pandemic reopening. This is a company that has made a number of high-profile acquisitions, targeting e-commerce and other growth sectors as the company expands.
Whether this expansion will ultimately prove to be profitable is the key question many investors have. Right now, this company’s subscription-based revenue model is valued at its cheapest rate in some time. Accordingly, I would certainly put Lightspeed on the more speculative end of the list of growth stocks that investors may want to add to the watch list right now.
BlackBerry
Another growth stock most investors would call speculative is BlackBerry (TSX:BB)(NYSE:BB). This former smartphone maker turned pure-play software company has been in a turnaround for years. However, the company has yet to find a way to become consistently profitable.
Despite various high-profile partnerships, the company’s software margins remain rather low, and there are a number of issues with this company’s growth profile that investors don’t like.
That said, in the autonomous vehicle software market, BlackBerry remains a leader. Those bullish on the company’s ability to grow its market share in this space may want to give BlackBerry a shot at these levels.
