Several high-growth Canadian stocks continue to trade at a lucrative discount from their highs. This creates a solid buying opportunity for investors with a long-term outlook. While the macro uncertainty could limit the upside potential in the near term, shares of fundamentally strong companies will likely deliver outsized returns over the next decade, enabling investors to earn solid capital gains.
Against this background, let’s look at four high-growth Canadian stocks with the potential to deliver stellar returns.
goeasy
goeasy (TSX: GSY) is one of my top picks due to its ability to consistently generate double-digit sales and earnings growth. Thanks to its growing earnings base, goeasy enhances its shareholders’ returns through regular dividend hikes. What stands out is that shares of this high-growth subprime lender are trading cheap (forward price-to-earnings multiple of 7.7 – much lower than the historical average), providing a solid entry point near the current price levels.
Its high-quality loan originations and stable credit performance, even amid a challenging macro environment, show the resiliency of its business. Further, its omnichannel offerings, wide product range, and operating efficiency will likely drive its top and bottom line at a double-digit rate in the coming years and support the upside in its stock price.
Shopify
Shopify (TSX: SHOP) stock rebounded and is up about 82% year to date. Despite this significant recovery, Shopify stock is trading at a considerable discount from its peak, indicating it has more room to run. The company continues to deliver strong revenues led by the strength in its gross merchandise volumes and growing merchant base.
With its innovative products like Payments and Capital, Shopify is well-positioned to capitalize on the ongoing shift in selling models toward multi-channel platforms. Further, its focus on streamlining its business, asset-light business model, and easing pressure on margins puts it on track to generate sustainable profitability in the long term and will drive its stock price higher.
Aritzia
Aritzia (TSX: ATZ) has managed to grow its revenue and earnings at a double-digit rate over the past several years. However, the near-term pressure on margins has led to a correction in its share price. Despite near-term challenges, Aritzia expects to deliver substantial revenues in the coming years, led by solid demand, a favourable mix, and boutique expansion in high-growth regions.
While its sales could continue to grow at a double-digit rate, its bottom line growth rate is expected to outpace sales, implying Aritzia could deliver profitable growth in the coming years. Thus, investors with a long-term view can leverage the recent pullback to go long on Aritzia stock.
Docebo
Docebo (TSX: DCBO) could be a solid addition to your portfolio in July. The company provides a cloud-based platform for enterprise learning and benefits from its growing enterprise customer base and strong subscription revenues. Also, a growing number of its customers opt for multi-year contracts, which adds stability and drives its average revenue per user.
Docebo has expanded its generative AI capabilities with a recent acquisition. Thus, investors planning to invest in AI (Artificial intelligence) related stocks could consider Docebo. Overall, its solid customer base, high recurring revenue base, new product launches, and focus on accretive acquisitions and achieving profitability will likely drive its stock price higher.
