The stock market in Canada has started a spectacular recovery in 2023. After losing 5.2% of its value in December, the TSX Composite benchmark inched up 7.1% in January, as signs of cooling inflation led to renewed buying in Canadian growth stocks, especially from the tech sector. But fortunately, despite their recent gains, many growth stocks still look undervalued due to a massive correction in their share prices in 2022.
But if you still wait for a market bottom, you might miss out on the opportunity to buy some fundamentally strong stocks at a big bargain.
In this article, I’ll highlight two of the best growth stocks in Canada you can buy now to hold for the long term.
Shopify stock
Shopify (TSX:SHOP) is a no-brainer Canadian growth stock to consider in 2023. After witnessing 73% value erosion last year, SHOP stock has already jumped by more than 42% in 2023 so far to $66.79 per share. With this, it has become the top-performing TSX Composite component of 2023 and has a market cap of $84.1 billion.
Despite its recent gains, Shopify stock is still down 46.5% in the last 12 months. In 2022, the shares of the Canadian e-commerce giant tanked sharply after its financial growth trends slowed due to the gradually subsiding pandemic-driven demand for digital commerce. In addition, SHOP stock became one of the biggest victims of last year’s meltdown in tech stocks.
Nonetheless, many recent company-specific developments clearly suggest that Shopify’s growth story isn’t over yet. For example, during 2022’s Black Friday Cyber Monday weekend, merchants on its platform set a new record with US$7.5 billion in sales. Similarly, the company recently accelerated its efforts to bring large retailers to its platform by launching commerce components and giving enterprise retailers access to its composable stack.
Besides these positive factors, Shopify’s decision to increase pricing for its subscription plans could help it expand profitability. Given that, you can expect this amazing Canadian growth stock to continue soaring in 2023 and beyond.
Nuvei stock
Nuvei (TSX:NVEI) could be another top growth stock on the Toronto Stock Exchange that you can buy right now. NVEI currently has a market cap of $6.7 billion as its stock trades at $48.31 per share with 40.4% year-to-date gains. This year’s rally comes as a big relief for its investors after the stock tanked by 58% in 2022.
In the quarter ended in September, Nuvei’s sales growth rate fell to 7.2% year over year from 18.6% in the previous quarter, hurting investors’ sentiments. However, it’s important to note that this slowdown in its revenue growth was partially due to foreign exchange tailwinds, which could be temporary.
On the positive side, Nuvei’s future growth outlook continues to improve as the payment technology firm remains focused on expanding its global market presence. For example, Nuvei announced its intentions to acquire the American payment tech company Paya Holdings in an all-cash deal worth $1.3 billion. Such growth initiatives could be one of the key reasons why Street analysts expect Nuvei’s sales growth to accelerate significantly in the second half of 2023. These positive expectations can help NVEI stock inch up further in the coming quarters, which is still down 41% in the 12 months.
