3 High-Growth TSX Stocks That Could Soar

These three TSX growth stocks are trading ultra-cheap, giving them the potential to soar significantly when the market rebounds.

| More on:
Growing plant shoots on coins

Image source: Getty Images

Throughout the year, as many investors know, stocks across the board have lost tonnes of value. However, while almost every company has been impacted, there’s no question that TSX growth stocks have faced some of the most significant selloffs and offer investors some of the best bargains.

As uncertainty creeps into markets, naturally, the valuations for stocks fall, as investors are unwilling to pay such high premiums in the new, higher-risk environment. Furthermore, as fears of a recession have picked up, many of these stocks are at risk of seeing their operations and profitability impacted, which lowers future earnings estimates.

Therefore, when you combine lower expected earnings over the coming years with investors who are unwilling to pay the same premium multiples for these earnings, the stocks can fall significantly.

And with growth stocks, we can see their short-term growth potential impacted severely. However, we can also see their valuations tumble rapidly as well. So, in this environment, while high-growth TSX stocks temporarily trade ultra-cheap, they are some of the best stocks to buy now.

A top Canadian tech stock

While some of the top TSX growth stocks have seen some of the most significant selloffs over the last 12 months, tech stocks in particular have been some of the worst impacted. That’s why if you’re looking to buy high-growth stocks that can soar, I’d start with a company like WELL Health Technologies (TSX:WELL).

WELL Health Technologies fell out of favour, as the pandemic and its impacts have slowly been easing. In addition, it’s also lost even more value, as the market has come under pressure this year. However, the stock has several reasons to be bullish, plus it trades dirt cheap.

First off, it serves a healthcare industry that’s not only defensive but also in need of innovation. In addition, WELL has built an impressive portfolio of healthcare businesses, including physical clinics as well as telehealth apps and other digital health businesses. Moreover, many of these companies are seeing impressive organic growth every single quarter.

Therefore, with WELL Health trading at a forward enterprise value (EV) to sales ratio of 2.3 times, it’s well undervalued and one of the best high-growth TSX stocks to buy now.

A top financial stock offering a significant opportunity

In addition to WELL, another incredible growth stock that you can buy at a major discount today is goeasy (TSX:GSY).

goeasy is a rapidly growing financial company that offers various loans to sub-prime borrowers across Canada. It started as a company that offered leasing on furniture (which it still does), but in recent years it has grown rapidly to offer many services, including personal loans and lines of credit and recently has been growing its auto loan segment.

Any companies that loan money have more risk in these uncertain environments, and, in goeasy’s case, loaning to borrowers with lower credit ratings certainly increases the uncertainty. However, with that being said, goeasy would have to see a more than doubling in its charge-off rate for it to even come close to losing money.

Therefore, while this high-potential stock trades at a discount, it’s one of the best high-growth stocks on the TSX that long-term investors can buy now.

One of the best growth stocks on the TSX

In addition to a high-quality tech stock and an outstanding financial stock, Aritzia (TSX:ATZ), a rapidly expanding retail company, is another one of the best high-growth stocks on the TSX.

Just like many other growth stocks, Aritzia has sold off this year in large part due to the market environment. However, because Aritzia is a women’s fashion retailer and sells discretionary items, there is certainly some worry among investors that its sales and growth could be impacted, especially in this high-inflation environment.

So far, throughout this year, though, Aritzia has continued to beat expectations, and its growth remains on track. What the stock really has going for it is that its e-commerce segment is highly popular. In addition, it has roughly two times as many stores in Canada as it does in the United States, giving it a massive runway for growth over the coming years.

So, while Aritzia trades undervalued, more than 30% off its high, it’s easily one of the best TSX growth stocks to buy now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has positions in ARITZIA INC, WELL Health Technologies Corp, and goeasy Ltd. The Motley Fool recommends ARITZIA INC.

More on Investing

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Want Easy Passive Income? Go With These 3 Canadian Dividend All-Stars

Are you looking for easy passive income? Here are three Canadian dividend all-stars.

Read more »

Man data analyze
Investing

3 of the Top-Growing Stocks on Earth

Canadians desperate for growth in a shaky market may want to look to growing stocks like Cardinal Health Inc. (NYSE:CAH).

Read more »

Nickel ore is mined from the ground.
Metals and Mining Stocks

Offset Market Volatility With a Shiny Investment

Looking to offset market volatility with a shiny investment you can hold for the long-term? Here’s a precious option to…

Read more »

grow dividends
Tech Stocks

BlackBerry (TSX:BB) Stock: The Best Buy for Your RRSP

BlackBerry stock is still falling after its quarterly result, despite a 28% revenue increase in its Internet of Things segment.

Read more »

green energy
Dividend Stocks

These Monthly Dividend Payers Could Carry Your Portfolio for Years

Building a portfolio takes years. Without further ado, invest in these monthly dividend payers and start earning.

Read more »

value for money
Tech Stocks

Stocks at a 50-80% Discount: Where to Invest $1,000 Right Now

These top TSX stocks are available at huge discounts and have the potential to easily double from the current levels…

Read more »

grow money, wealth build
Dividend Stocks

3 TSX Stocks to Make the Perfect Passive Income Portfolio

If you're an investor who wants to set it and forget it, these three TSX stocks are ideal for your…

Read more »

warning or alert
Tech Stocks

Earnings Alert! Is BlackBerry Stock a Buy After its Q2 Event?

Here’s why weakness in BlackBerry’s (TSX:BB) cybersecurity sales could be temporary.

Read more »