After witnessing a massive selloff last year, most Canadian growth stocks have started 2023 on a solid note by staging a sharp recovery. The TSX Composite benchmark has gained 4.5% this year so far after losing nearly 9% of its value last year. Despite a partial recovery in growth stocks this year, many of such fundamentally strong stocks still look undervalued based on their long-term growth potential. That’s why it could be the right time for long-term investors to add such stocks to their portfolios before it’s too late.
In this article, I’ll talk about two of the smartest growth stocks, trading below $50 per share, you can buy right now on the Toronto Stock Exchange.
Nuvei (TSX:NVEI) could be one of the most attractive Canadian growth stocks to consider today. This Montréal-headquartered payment technology provider currently has a market cap of $6.1 billion. After losing 58% of its value in 2022, NVEI stock has already recovered by more than 25% in 2023 to currently trade at $43.11 per share.
In 2021, Nuvei’s revenue jumped 93% on a YoY (year-over-year) basis to US$724.5 million, as the demand for its payment services strengthened globally. While slowing global economic growth and inflationary pressures took a toll on its business growth last year, it still managed to post 22% YoY positive revenue growth in the first three quarters of 2022. Its adjusted earnings grew positively by about 16% YoY during the same period, showcasing underlying strength in its fundamentals.
Last month, Nuvei announced intentions to acquire the American payment processor Paya Holdings in an all-cash deal worth about US$1.3 billion. Such growth-oriented steps should help Nuvei expand its global market presence and speed up its financial growth trends in the long term, which should help its stock soar.
BlackBerry (TSX:BB) has been one of my favourite Canadian tech stocks lately, as I find its growing presence in the automotive technology space impressive. The Waterloo-based tech firm currently has a market cap of $3.1 billion, as its stock trades at $5.28 per share with about 20% year-to-date gains.
Last year, BB stock plunged 62.7% after growing macroeconomic uncertainties triggered a tech sector-wide crash. In the first three quarters of its fiscal year 2023 (its fiscal year 2023 will end in February), the Canadian tech company registered a 7% YoY decline in its cybersecurity segment revenue. This weakness could be another reason why its stock remained under pressure last year.
On the positive side, BlackBerry’s IoT (Internet of Things) segment revenue jumped by 21% YoY during the same period. I expect the contribution of the IoT segment to the company’s total revenue to significantly increase in the coming years with the help of its upcoming artificial intelligence and machine learning-based automotive technological solutions. For example, BlackBerry plans to make its intelligent vehicle data platform IVY generally available in May this year. Note that the company has already pre-integrated the IVY on three commercially available digital cockpit platforms.
Growing demand for such advanced automotive technological solutions could help BlackBerry accelerate its financial growth in the coming years, making its stock worth buying right now to hold for the long term.