3 TSX Mid-Cap Stocks With Massive Growth Potential

Given their growth prospects and attractive valuations, these three mid-cap stocks would be excellent long-term buys.

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Mid-cap companies will have a market capitalization between $2 billion and $10 billion. These companies offer higher growth prospects than large-cap stocks and are more stable than small-cap stocks. So, investors can enjoy the best of two worlds. So, here are three top mid-cap stocks that you can buy right now.

BlackBerry

BlackBerry (TSX:BB) is one of the top mid-cap stocks to have in your portfolio, given its presence in high-growth markets, such as cybersecurity and IoT (Internet of Things). Amid growing digitization, the demand for cybersecurity solutions is rising. Despite the growing competition, the company’s revenue from the cybersecurity segment increased sequentially amid solid performance from its core verticles. The company has strengthened its product portfolio by launching new artificial intelligence-powered products.

Moving to its IoT business, around 235 million vehicles had its QNX platform by the end of the first quarter of fiscal 2024, representing a 20 million increase from the previous year’s quarter. Continued design wins and growing demand for connected cars could continue to drive its revenue from the segment.

Further, McKinsey has projected that the convergence of cybersecurity and IoT could create an addressable market of $750 billion by the end of this decade. Given its proficiency in both sectors, BlackBerry is well positioned to benefit from the convergence. Given its multiple growth drivers, I expect BlackBerry to outperform over the next 10 years.

Nuvei

Second on my list is Nuvei (TSX:NVEI), a payment processing company that facilitates businesses to accept next-gen payment methods. The company has been under pressure this month, losing around half its stock value. Weak second-quarter earnings, the slashing of 2023 guidance, and the announcement by the company of terminating its relationship with a large customer led to a selloff.

However, the growth in e-commerce has made digital payments popular, thus expanding the addressable market for Nuvei. Many research firms predict that the global digital markets will grow in double digits for the rest of the decade. Amid the expanding market, the fintech company is launching innovative products and expanding its alternative payment methods portfolio. So, given its healthy growth prospects and discounted stock price, I believe Nuvei will deliver superior returns in the long run.

Lightspeed Commerce

Another midcap stock you could buy right now is Lightspeed Commerce (TSX:LSPD), which provides omnichannel commerce solutions to businesses. Earlier this month, the company posted its first-quarter earnings for fiscal 2024, with its revenue growing by 20%. Its adjusted net losses also improved from $17.6 million in the previous year’s quarter to $2.2 million.

Meanwhile, I expect the uptrend in Lightspeed’s financials to continue amid the shift in customer base towards higher GTV (gross transaction value) locations. During the quarter, customer locations with GTV of over $500,000/year and $1 million/year increased by 10% and 11%, respectively. However, customer locations with GTV of less than $200,000/year fell. The company continues to develop innovative products and venture into new markets, which could aid in expanding its customer base.

Meanwhile, Lightspeed’s management expects its fiscal 2024 revenue to be between $875 million and $900 million, with the midpoint representing a 19% growth from the previous year. Its adjusted earnings before interest, tax, depreciation, and amortization could break even this fiscal year. So, I believe Lightspeed, which trades at a price-to-book multiple of 0.9, would be an excellent long-term buy right now.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

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