2 TSX Stocks That Will Surprise You Tremendously With Their Upside

Create wealth with these TSX stocks with solid upside potential. Buy them cheap at current levels.

| More on:

With massive correction in top TSX stocks, now is the time to bet on the shares of the companies that have lost substantial value without anything being wrong with their businesses. Consider the shares of Shopify (TSX:SHOP) or Docebo (TSX:DCBO). Both these stocks have underperformed this year and are trading near their 52-week lows. However, their businesses remain strong, indicating that their shares could rebound swiftly, as the macro environment improves. 

So, if you have a 10-year view, Shopify and Docebo stock would surprise you tremendously with their upside. These shares could eventually bounce back to their highs, translating into stellar returns. For instance, Shopify’s 52-week high stands at $222.87, implying an upside of about 464% from current levels. Similarly, Docebo stock has an upside potential of 164%. 

Let’s look at the factors that make these tech stocks solid long-term picks.

Secular tailwinds and investments to support Shopify’s recovery

Shopify has invested heavily to fortify its e-commerce infrastructure, like POS (point of sale) and fulfillment. This positions it well to capitalize on the structural shift in selling models towards multi-channel platforms. 

Shopify’s management stated that its investments to support long-term growth have started to gain traction and will positively impact its business in the coming quarters. Its investments will support sales, expand its addressable market, and increase its penetration. Further, the growing adoption of POS, including the strong demand for offline retail offerings, bodes well for growth. 

Shopify is also expected to benefit from the strengthening of its fulfillment capabilities. Its recent acquisition of Deliverr will likely be accretive to its earnings and drive long-term growth. Also, its partnerships with top social media companies will drive its merchant base and volumes. 

While Shopify’s sales and marketing initiatives will drive its market share, its valuation is at a multi-year low. Its enterprise value-to-sales multiple of 5.1 looks attractive and presents an excellent buying opportunity. 

Ongoing momentum to drive Docebo stock higher

While the correction in Shopify stock followed the slowdown in e-commerce trends, the momentum in Docebo’s business has sustained. It’s worth highlighting that Docebo’s organic sales (represented by annual recurring revenue) remained strong and recorded a 48% growth in the last reported quarter. Overall, its annual recurring revenue has grown at a CAGR (compound annual growth rate) of 66% from 2016 to 2021. 

Besides its solid annual recurring revenues, Docebo’s growing enterprise customer base, increase in average contract value, and high customer retention rate impresses. 

Its average contract value has increased from US$12,000 in 2016 to $45,000 in the second quarter of 2022. Meanwhile, its customer base rose to approximately 3.1K in the second quarter of 2022 from 0.9K in 2016. Furthermore, its net dollar-based retention rate stands at 113%, which is encouraging.

Looking ahead, new product launches, geographic expansion, opportunistic acquisitions, strategic alliances, and its land-and-expand strategy position it well to deliver solid double-digit growth. Moreover, Docebo stock trades at a forward enterprise value-to-sales multiple of 4.4, which is much lower than its historical average of about 13.6, providing a good buying opportunity for long-term investors. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Docebo Inc. The Motley Fool has a disclosure policy.

More on Tech Stocks

Man holds Canadian dollars in differing amounts
Tech Stocks

TFSA: 2 TSX Stock for Your $7,000 Contribution

Are you wondering how to take advantage of the new TFSA contribution increase for 2025? Here are two great growth…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Tech Stocks

Top TFSA Stocks to Buy Now for Canadian Investors

Here are two top Canadian growth stocks long-term investors may want to consider adding to their TFSAs right now.

Read more »

rising arrow with flames
Tech Stocks

Return of the Roaring 20s? 1 E-Commerce Stock Potentially Set to Soar in 2025

Shopify (TSX:SHOP) stock could rise even higher on the back of Black Friday catalysts.

Read more »

game gamble
Tech Stocks

Is Shopify Stock a Buy, Sell, or Hold for 2025?

Shopify stock has been making a comeback, but more could be on the way in 2025. Let's take a look.

Read more »

dividend growth for passive income
Tech Stocks

3 Growth Stocks With Potential Multi-Fold Returns in a Decade

Given the favourable environment and their growth initiatives, these three growth stocks can deliver superior returns in the long run.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

Who Will Be the AI Winners of 2024? Here Are the Top Contenders

From Nvidia stock's dominance to Palantir's rise, meet the top artificial intelligence (AI) stocks shaping the AI revolution!

Read more »

up arrow on wooden blocks
Dividend Stocks

3 Growth Stocks to Buy and Hold Forever

These growth stocks may seem a bit risky at top heights, but don't count them out for future earnings as…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

This AI Stock Is a Screaming Buy, and Nobody’s Noticing Yet

As BlackBerry continues to integrate AI technology in its cybersecurity as well as IoT solutions, its stock could deliver solid…

Read more »