After delivering impressive returns last year, tech stocks are under pressure this year. Rising interest rates, the expectation of growth slowing down, and concerns over their higher valuations have caused a selloff in the tech space. However, the steep correction has provided an excellent entry point for long-term investors in the following four tech stocks.
Lightspeed Commerce
Amid the weakness in the tech space and a shot report from Spruce Point Capital Management, Lightspeed Commerce (TSX: LSPD)(NYSE: LSPD) has lost 83% of its stock value compared to its 52-week high. However, as retailers and restaurant owners continue to strengthen their digital presence, the demand for the company’s products and services is rising.
Meanwhile, the company is broadening its product offerings, growing payments penetration, and venturing into new markets to drive growth. It recently launched a new B2B platform for North American fashion, outdoor, and sports retailers. Amid the favourable environment and its growth initiatives, Lightspeed Commerce’s management expects its revenue to grow by 35-40% in fiscal 2023. So, given its healthy growth prospects and discounted stock price, I expect Lightspeed Commerce to deliver solid returns over the next three years.
BlackBerry
With the growing demand for advanced driver-assistance systems and digital cockpits, I have selected BlackBerry (TSX: BB)(NYSE: BB) as my second pick. With the rising popularity of connected and autonomous vehicles, the company’s IVY platform could be a substantial growth driver in the coming years. The platform has received multiple requests from OEMs to develop proof of concept.
Moving to the cybersecurity space, BlackBerry is strengthening its product offerings to increase its market share. Despite the rising competition, the company’s advanced products continue to resonate with blue-chip companies. Despite its multiple growth drivers, the company is trading at a discount of 48% from its November highs, thus providing an excellent buying opportunity.
WELL Health Technologies
The telehealthcare industry, which had boomed during the pandemic, also continues to grow in the post-pandemic world. Due to convenience, cost effectiveness, and accessibilities, telehealthcare services are becoming popular among patients. So, given the favourable environment, I have selected WELL Health Technologies (TSX: WELL) as my third pick.
Meanwhile, WELL Health is expanding its presence in the United States and Canada through strategic acquisitions. Its acquisition of INLIV allows the company to expand its footprint to Alberta. The combined revenue of its recent acquisitions, Circle Medical and Wisp in the United States, have crossed $110 million in annualized run rate. So, given its high growth potential, I expect the company to continue posting solid financials in the coming quarter. Meanwhile, WELL Health is trading at a 62% discount from its recent highs, thus offering an excellent entry point for long-term investors.
Docebo
My final pick is Docebo (TSX: DCBO)(NASDAQ: DCBO), a corporate e-learning solutions provider. Despite economic reopening, the adoption of e-learning solutions continues to rise due to their cost effectiveness, and convenience. Meanwhile, Markets and Markets projects the LMS market to grow from US$15.8 in 2021 to US$37.9 billion by 2026. Given its multi-product learning suite, the company is well equipped to benefit from the expanding addressable market.
Further, Docebo’s growing customer base, rising average contract value, and multi-year contracts continue to support its financials in the coming quarters. Amid the recent selloff, the company has lost 65% of its stock value compared to its 52-week high. Its NTM price-to-sales multiple has declined to 6.1, lower than its historical average. So, I believe long-term investors can start accumulating the stock to earn superior returns.
