Now is the time to add several high-growth stocks to your portfolio to create a significant amount of wealth in the long term. The reason is simple: most high-growth stocks are trading cheap, thus creating an excellent buying opportunity.
This article will focus on shares of three such companies growing fast and poised to deliver stellar returns in the long term.
Shopify
The recent selloff in Shopify (TSX: SHOP)(NYSE:SHOP) stock has wiped out a significant portion of its gains. For instance, Shopify stock is down over 49% this year. The moderation in growth and valuation concerns weighed on Shopify stock. However, the selloff indicates that negatives are reflected in Shopify stock. Further, the massive erosion in its price has created a buying opportunity for investors.
Though Shopify’s management expects growth to moderate a bit compared to 2021, I am upbeat over its long-term prospects and expect it to grow revenues rapidly in the coming years. Its growing market share, increased adoption of its payments solutions, and expansion of its product suite will likely accelerate its growth.
Meanwhile, its investments into e-commerce infrastructure, expansion of fulfillment capacity, and ongoing strength in social commerce bode well for growth. While Shopify’s fundamentals remain strong, its valuation is at a multi-year low, making it attractive at current levels.
Docebo
Docebo (TSX: DCBO)(NASDAQ: DCBO) stock has corrected about 38% in six months. Meanwhile, it has decreased about 22% this year. The pullback in its price presents a good buying opportunity for investors, especially as the company is growing fast and has multiple growth vectors.
Notably, Docebo’s underlying business remains strong, reflected through the stellar growth in ARR (annual recurring revenues) and continued customer growth. For context, Docebo’s ARR has been growing at more than 60%, while its average contract value continues to increase at a healthy pace.
Overall, the pullback in Docebo stock, its strong ARR, expansion of customer base, larger deal size, high retention rate, and opportunistic acquisitions provide a solid platform for future growth and support my bullish outlook.
Lightspeed
Shares of Lightspeed (TSX: LSPD)(NYSE: LSPD) are trading at a big discount due to the significant selling over the past six months. It’s worth noting that LSPD stock has dropped more than 75% in six months, while it is down about 33% this year. The significant correction in its price reflects a slowdown in organic sales. Further, a short report from Spruce Point led to this massive selling.
The considerable erosion in LSPD’s stock price indicates that negatives are priced in, while its stock is trading at a multi-year low. Due to the selloff, Lightspeed stock is trading at a forward EV-to-sales multiple of 4.4, much below its historical average.
While Lightspeed stock is trading cheap, its revenues continue to grow rapidly on the back of acquisitions and strength in the base business. Furthermore, the growing penetration of its payments solutions, expansion into high-growth markets and sectors, and increased customer base augur well for future growth. Also, its increasing product base, geographic expansion, and higher average revenue per user bode well for future growth.
