The market has witnessed significant selling in the recent past, leading to a compression in valuation multiples of several top TSX stocks. While the stock market could stay volatile in the short term, it has created a buying opportunity. So, if you could spare some extra cash, consider adding these multibagger stocks trading at significant discounts.
Shopify
Shopify (TSX: SHOP)(NYSE:SHOP) has created a significant amount of wealth for its shareholders. However, growth concerns and an expected interest rate hike has led to a massive correction in its price, representing an excellent opportunity for investors to buy this multibagger.
Notably, Shopify stock has declined by over 53% this year. Further, it has lost near 64% of its value from the 52-week high. While Shopify’s growth is expected to remain below the 2021 levels, it is likely to increase at a solid double-digit rate, which supports my view.
Shopify’s multi-channel platform, growing market share in the U.S. retail sales, higher adoption of its payments solutions, and expansion of product suite position it well to capitalize on the ongoing shift in selling models towards the omnichannel platform.
Further, Shopify continues to invest in e-commerce infrastructure and is expanding its fulfillment capacity, which will likely drive its future sales and margins. Moreover, the strength in social commerce and the acquisition of merchants bode well for growth.
goeasy
goeasy (TSX: GSY) has multiplied its investors’ wealth over the past several years. Shares of this financial services company have consistently delivered above-average returns and outperformed the broader markets by a wide margin.
However, due to the recent selling, goeasy stock has witnessed a healthy pullback. It’s worth noting that goeasy stock has decreased by about 21% this year, while it has declined by 36% from the 52-week high. This pullback presents a solid buying opportunity, as the company continues to expand rapidly and is growing its earnings at a breakneck pace.
goeasy projects double-digit growth in its revenues over the next three years. Meanwhile, higher sales and operating leverage will likely cushion its profitability. Its growing loan volumes, large addressable market, expansion of product base, and omnichannel presence bode well for growth. Further, higher loan ticket size, increased penetration of secured loans, and strong credit performance supports my bullish view.
Besides appreciation in its price, goeasy has consistently enhanced its shareholders’ returns through dividend hikes. Looking ahead, goeasy could continue to grow its dividend at a double-digit rate and boost its shareholders’ overall returns.
Docebo
Shares of e-learning platform provider Docebo (TSX: DCBO)(NASDAQ: DCBO) have marked significant pullback in the recent past. Docebo stock fell about 34% this year, while it has decreased by 47% in six months. While Docebo stock has corrected quite a lot, its organic sales continue to grow fast, making it attractive on the valuation front.
It’s worth noting that Docebo’s annual recurring revenue is growing at +60%, which is encouraging and is indicative of future revenue growth. Meanwhile, its customer base continues to expand. Also, the company average contract value is trending higher, which bodes well for future growth.
Looking ahead, the ongoing momentum in its organic sales, increasing deal size, expansion of customer base, product innovation, and high net dollar retention rate augur well for growth. Moreover, its improving marketing capacity will likely cushion margins, and opportunistic acquisitions will likely accelerate its growth.
