Canadians can use the flexibility and benefits associated with the TFSA (Tax-Free Savings Account) to build long-term wealth. For instance, you can hold quality growth stocks in this registered account and benefit from outsized gains over time. As the TFSA is tax-sheltered, you can accelerate your wealth-building goals by holding these two stocks in the account.
Is Okta a good stock to buy?
Down 72% from all-time highs, Okta (NASDAQ:OKTA) stock is valued at a market cap of US$13.6 billion. It provides identity solutions for enterprises, allowing the company to increase sales from US$568 million in fiscal 2020 to US$1.85 billion in fiscal 2023 (ended in January). It offers a suite of products and solutions that enable users to manage and secure their digital identity.
In the July quarter, Okta increased sales by 23% year over year despite lower enterprise spending. Okta increased its customer base by 12% year over year, which was lower than the expansion rate of 14% in the year-ago quarter.
However, Okta continues to enjoy large customer wins as it ended fiscal second quarter (Q2) with a record number of annual customer contracts over US$5 million. It is also finding ways to increase customer spending on its platform via cross-selling its portfolio of products and solutions.
Despite its widening top-line growth, Okta remains unprofitable. In the last six months, it reported operating losses of $322 million, compared to $448 million in the year-ago period. However, its operating cash flow is positive and accounts for 10% of sales compared to an outflow of 5% in the prior-year quarter.
Analysts tracking OKTA stock expect sales to rise by 19.2% to US$2.22 billion in fiscal 2024 and by 16% to US$2.57 billion in fiscal 2025. It is forecast to improve the bottom line from a loss per share of US$0.04 in 2023 to adjusted earnings of US$1.49 per share in 2025.
Wall Street remains bullish and expect shares to gain 15% in the next 12 months.
What is the target price for WSP Global stock?
One of the top-performing TSX stocks, WSP Global (TSX:WSP) has already returned close to 700% in dividend-adjusted gains to shareholders since October 2013. WSP is a professional services and consulting company with operations in Canada, the U.S., and several other international markets. It advises, plans, and manages projects for rail, transit, aviation, water, tunnels, highways, bridges, and urban infrastructure projects for public and private sector clients.
Despite a challenging macro environment, WSP Global increased organic sales by 9.3% year over year in Q2. After accounting for the acquisition of the environment and infrastructure business of John Wood Group, total sales grew by 31.2% to $3.63 billion.
Its backlog at the end of Q2 stood at a record $14.3 billion, representing 12 months of revenue. Its organic order intake in the June quarter was $4 billion, which is another quarterly record for the company.
WSP Global stock is forecast to increase adjusted earnings from $5.75 per share in 2022 to $7.78 per share in 2024. So, the TSX stock trades at 24.8 times forward earnings, which is not too steep given its robust growth estimates. It currently trades at a discount of 7% to analyst price target estimates.
