Shares of Shopify (TSX:SHOP) stock have investors perhaps feeling like we’re back in the glory days. Shopify stock continues to climb higher after the company made several announcements. Yet is it the only good choice on the TSX today?
What happened?
Shopify stock saw a surge in share price of around 30% after earnings came out. The company’s earnings weren’t actually the big hit, as the company made two announcements. The first was it would be creating $230 million in savings from laying a large portion of its management roles.
The second announcement garnered even more interest. Shopify stock announced it would be divesting its logistics business to Flexport. In return, it would receive a 13% stake in the company. This would allow Shopify stock to focus on its e-commerce business, where it’s seen so much success in the past.
However, shares have since climbed 75% in the last year, 61% year to date, and 24% in the last month alone. So, the huge run might be coming to a close, with some stability in the future, if not a drop. There’s another option I’d consider instead.
goeasy stock
Instead of Shopify stock, I would consider goeasy (TSX:GSY) instead as the next growth stock to take a hard look at. The company also saw growth in the last few years, but it had a major drop with other winners that saw investors needing a cash influx.
However, shares dropped even further after an announcement from the Federal Government. During its budget announcement, the government stated it would be reducing the maximum allowable rate of interest to an annual percentage rate of 35%.
This led investors into a panic, with goeasy stock dropping 14% at the news practically overnight. Yet after earnings came out, there were a few things that goeasy stock wanted investors to consider.
On the move
goeasy stock has since recovered significantly, mainly coming down to earnings. Management made it clear that it was future rates that could not be at the 35% level. However, it also is making plans to make a smooth transition, with management stating they believe the ruling will work in their favour.
The announcement in earnings came with yet another record quarter. Loan originations rose 29% year over year, with loan growth up 58% and revenue up 24% to $287 million. The stock beat out estimates once again, and even an updated forecast didn’t look dire.
In fact, goeasy stock increased its forecasted revenue for 2023 from between $1.15 and $1.25 billion to between $1.20 and $1.25 billion. Return on equity remained stable at 22% as well. And while 2024 and 2025 lowered slightly, it remained a broad range that included previous targets.
Bottom line
While Shopify stock has hit its stride, should a recession come down this summer shares could drop once more. Meanwhile, goeasy stock is up and climbing, with more room to grow. Should it hit 52-week highs, that’s a potential upside of 53% as of writing — all while bringing in a current dividend yield at 3.58%.
