The TSX has been in a correction mode for quite some time now. Several red-hot tech stocks have fallen drastically after trading at record highs in 2022. A recession is looming around the corner in addition to rising interest rates and decade-high inflation numbers.
While this could be scary, it is also a great opportunity to pick up quality stocks trading at a steep discount. Here are three such growth stocks that could soar when the macro situation improves.
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Lightspeed Commerce
Lightspeed Commerce (TSX: LSPD)(NYSE: LSPD) was a Bay Street favourite before a damning report by Spruce Point Capital cut short a glorious bull run. The stock has fallen from $160 levels in September 2021 to $26.19 on July 22. It has lost almost 48% in 2022.
However, the company could be on the edge of a turnaround. It reported solid numbers for the last quarter of fiscal 2022 (ended in March). Lightspeed services thousands of physical businesses across the world with its SaaS (Software as a Service) platform.
With more people returning to the physical world, the company expects business to grow at a strong rate. For Q4, it reported an increase of 77% in its subscription revenue and an 88% increase in its transaction-based revenue. Overall, revenue grew 78%, and its guidance for Q1 of fiscal 2023 looks strong.
LSPD stock has an average target price of $60.94, indicating a potential upside of almost 133%. Lightspeed is a growth stock that could get back on track very fast.
Nuvei
Canadian payment technology firm Nuvei (TSX: NVEI)(NASDAQ: NVEI) is another growth stock that is poised to soar. A key factor for this is that the company is not dependent on just North America for its revenues. Last year, 54% of its sales came in from Europe, the Middle East, and Africa.
The last two weeks have seen a surge in deals and partnerships. International clothing retailer Hatley chose Nuvei to run omnichannel payments. This includes 40 stores in North America and its online sales in Europe. Multi Wholesale Supplies, a top B2B (business-to-business) retailer for medical equipment, has also partnered with Nuvei for payments.
Nuvei stock has lost almost 44% in 2022 and is currently priced at $45.7. The average target price for Nuvei stock is $107.98, which represents a potential upside of 136%.
Shopify
The third and final stock on this list is Shopify (TSX: SHOP)(NYSE:SHOP). This stock was one of the hottest ones during the pandemic, but shares of the e-commerce giant have slumped almost 70% year to date.
E-commerce sales in the U.S. for Q1 accounted for just 14.3% of total sales. If this is the case in the world’s largest economy, the growth potential for Shopify around the world is huge.
Right now, overall economic macro conditions are not favourable, and the stock could still see some headwinds, but once the situation improves, Shopify should soar. Shopify shares recently went through a stock split and is now very affordable, which should increase liquidity in the stock, too.
The stock closed July 22 at $48.24, and the average analyst target price for the stock is $97.92 — a potential upside of 102%. Shopify is a proven performer, and it won’t stay down for too long.
