Investing in Growth? These TSX Stocks Have the Potential to Soar

These three TSX stocks have so much more room to run for investors wanting to get in on a deal right now, and hold on for years.

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The TSX today is in a funny place right now. Investors are practically itching to get back into investing, which is why we’ve seen a few stocks surge in the last few weeks following solid earnings reports. However, there is still worry about a recession, though perhaps a mild one. That is what makes it so hard to identify TSX stocks set to soar.

However, we can certainly look to what’s been happening lately as a reason for investors to consider TSX stocks potentially about to soar this year. What’s more, these stocks are likely to continue climbing.

WELL Health stock

It was curious that WELL Health Technologies (TSX:WELL) shares didn’t jump after solid earnings. WELL Health stock continued to produce record earnings after record earnings, but with zero applause. The stock sunk lower and lower after pandemic restrictions eased, alongside the drop in technology stocks.

However, WELL Health stock continued to prove it had a strong path to growth. This has come through acquisitions, as well as a pretty much endless amount of growth in the telehealth industry. Virtual healthcare continues to see desperate need, as wait times in hospitals and doctor’s offices hamper patient health.

Shares of WELL Health stock are now up 58% year to date, though they dropped after earnings. Yet this is despite achieving record revenue of $169.4 million, an increase of 34% year over year. However, this didn’t beat estimates, which is likely the reason for the drop. Even so, management still expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to increase by 10% in 2023. So now could be a great time to pick up the stock and potentially see it double among TSX stocks.

Lightspeed Commerce

Another growth story could be Lightspeed Commerce (TSX:LSPD), as the ecommerce company continues to expand on its already existing platforms. These include the ecommerce field, as well as the point-of-sale industry. However, Lightspeed stock seems to be following in its ecommerce peers’ footsteps, looking to focus on what made it a hit in the first place.

Lightspeed stock recently announced it would “double down” on payments, pushing new and existing customers to use its own payment software. This, however, may cause some short-term pain, according to analysts. The change would see users pay a transaction fee, unless they go over to Lightspeed’s payment methods.

This could impact adjusted EBITDA in the short term, with the company forecasting a $10 million loss for first quarter fiscal 2024. This comes from offering pretty much everything under the sun these merchants would need to make the switch, costing the company quite a lot. Long term, however, management is confident it will bring in more revenue. Especially with new clients. Once investors are on board, this could certainly see Lightspeed stock double among TSX stocks, given it’s down 38% in the last year.

CGI stock

You don’t have to pick stocks that are down to see major growth, which is why CGI (TSX:GIB.A) is a great option. Shares are up about 30% in the last year as of writing, with the company seeing a steady increase even during this market downturn among TSX stocks.

The reason is that the company continues to create strong partnerships, providing software to companies around the world, in every field. It’s able to do this through a strong acquisition strategy that has proven fruitful for years.

While it’s not cheap, it’s also not too expensive either trading at 22.6 times earnings as of writing. CGI stock continues to beat out earnings estimates as well again and again. Most recently, it saw revenue at US$2.8 billion, boosted by a major increase in the use of the company’s products around the world. The stock has dipped slightly as of late, so it could be a good time to get back in on a deal before it bounces back.

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 Amy Legate-Wolfe has positions in Lightspeed Commerce and Well Health Technologies. The Motley Fool recommends CGI and Lightspeed Commerce. The Motley Fool has a disclosure policy.

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