Stock Market SellOff: 2 Canadian Growth Stocks to Buy Hand Over Fist

Here are two of the best Canadian growth stocks you can buy at a big bargain amid the market selloff.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

Continued macroeconomic challenges, including inflationary pressures and a higher interest rate environment, have reignited the Canadian stock market selloff in September 2023, especially in growth stocks. The U.S. Federal Reserve, in its latest economic projections, suggested that inflation and interest rates might remain elevated for a longer period than earlier expected. This is one of the key reasons why the S&P/TSX Composite Index has seen more than 8% value erosion in September so far.

While the stock market downtrend might make new investors nervous, experienced investors tend to utilize it as an opportunity to buy their favourite growth stocks at a big bargain. Buying some fundamentally strong growth stocks cheap and holding them for the long term has the potential to significantly boost your returns on investments.

In this article, I’ll highlight two really attractive high-growth Canadian tech stocks you can consider buying at a bargain amid the market selloff.

Lightspeed stock

If you don’t know about it already, Lightspeed Commerce (TSX:LSPD) is a one-stop commerce platform provider headquartered in Montréal. The platform aims to help merchants globally easily scale their business and improve their customers’ experiences. The company currently has a market cap of $3 billion as LSPD stock trades at $19.02 per share after losing nearly 14% of its value in September so far due mainly to the recent broader market declines.

The ongoing growth trend in Lightspeed’s financials looks healthy as the company has been exceeding Street analysts’ bottom-line expectations for the last five consecutive quarters. In the first quarter of its fiscal year 2024 (ended in June), the tech firm posted a double-digit 20% YoY (year-over-year) increase in its total revenue to US$209.1 million, despite macroeconomic challenges due mainly to a solid 32% jump in its transaction-based revenue. With the help of this strong sales growth, Lightspeed posted an adjusted net quarterly loss of US$2.2 million, significantly less than its adjusted net quarterly loss of US$17.6 million a year ago and also much better than analysts’ estimate of a US$8.6 million loss.

Although economic difficulties might hamper its financial growth in the short term, Lightspeed remains on track to achieve sustainable profitability in the coming years with its consistently expanding global presence and focus on growing revenue from financial services.

Kinaxis stock

Kinaxis (TSX:KXS) is another Canadian growth stock that has been hit hard by the recent market selloff. After rallying by more than 38% in the previous three quarters in a row, KXS stock has seen 21.2% value erosion in the September quarter so far to currently trade at $149.12 per share, trimming its market cap to $4.3 billion.

This company primarily focuses on providing supply chain planning and management solutions to businesses across the world. In the second quarter, Kinaxis posted a strong 31% YoY increase in its total revenue to US$105.8 million, along with an impressive number of customer wins. More importantly, its adjusted quarterly earnings of US$0.25 per share reflected a handsome 78.6% YoY positive growth.

Overall, Kinaxis’s ability to continue delivering strong financial growth even in a difficult economic environment makes this Canadian growth stock look undervalued after recent declines.

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.

The Motley Fool recommends Kinaxis and Lightspeed Commerce. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Tech Stocks

edit Woman calculating figures next to a laptop
Tech Stocks

How to Buy UiPath Stock in Canada

UiPath is a beaten-down AI stock that trades at a massive discount to its earnings growth. Is the tech stock…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

Is It Still Prudent to Invest in Shopify Stock?

Let's dive into whether Shopify (TSX:SHOP) remains a top TSX stock investors should consider, or if this company may be…

Read more »

edit Businessman using calculator next to laptop
Tech Stocks

Which TSX Stock Is Best to Buy Today? 

The stock market is going green with optimism over hopes of economic recovery. You can benefit from this rally with…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Tech Stocks

Tech Treasures: 2 Undervalued Software Stocks to Watch

These two software stocks have a bright future, according to analysts, and a bright present for investors getting in on…

Read more »

Growth from coins
Tech Stocks

2 Growth Stocks I’d Buy in July 2024

Here's why quality growth stocks such as Datadog should help you deliver outsized gains in the upcoming decade.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Celestica Stock Now?

Celestica (TSX:CLS) stock has seen shares surge by 289% in the last year alone! But is growth over? Or could…

Read more »

woman retiree on computer
Tech Stocks

2 Top TSX Growth Stocks to Buy Today and Hold for 10 Years

Given their long-term growth prospects and discounted valuations, these two growth stocks could deliver multi-fold returns in the long run.

Read more »

hot air balloon in a blue sky
Dividend Stocks

3 Roaring Stocks to Hold for the Next 20 Years

Sure, there are stocks roaring upwards in the last year, but these three can claim doing it for decades.

Read more »