Generally, stocks that have the potential to deliver 1,000% returns over time are defined as millionaire-makers. So, investors should identify companies that grow revenue and earnings at a faster pace compared to the broader markets to benefit from outsized gains.
I have identified three millionaire-maker tech stocks you can consider buying today.
Payfare stock
Valued at $300 million by market cap, Payfare (TSX: PAY) operates in the fintech segment, providing instant payout and digital banking solutions to gig economy workers in North America.
Payfare increased revenue by 35% year over year to $47.2 million in the third quarter (Q3) of 2023. It ended the quarter with more than 1.21 million active users, an increase of 32% year over year. Moreover, the company’s adjusted net income more than tripled to $7.5 million, while free cash flow rose 29% to $3.6 million in Q3.
Payfare was selected in two requests for proposals to launch finance programs for strategic partners. It signed an agreement with one of these partners, an international big-box retailer, to provide earnings payouts to the retailer’s gig workforce in Canada.
Analysts tracking the TSX tech stock expect the company’s adjusted earnings per share to improve from $0.28 in 2023 to $0.58 in 2024. So, priced at 10.9 times forward earnings, Payfare is an undervalued growth stock that trades at a discount of 50% to consensus price target estimates.
Telus International stock
Valued at $3.3 billion by market cap, Telus International (TSX: TIXT) designs, builds, and delivers artificial intelligence and content moderation solutions for global brands. Similar to other growth stocks, Telus International trades 75% from all-time highs due to a challenging macro environment.
However, the company continues to focus on expanding its customer base. In Q3 of 2023, Telus onboarded several new clients, including a U.S.-based online food delivery platform and a property and casualty insurance provider, in addition to a Europe-based luxury fashion retailer.
In the last three quarters, the company has increased sales by 10% year over year to $2 billion. While sales growth has decelerated in recent quarters, Telus International grew its free cash flow by 54% to $159 million in the September quarter.
Priced at 6.3 times forward earnings, Telus International stock trades at a discount of 110% to consensus price target estimates.
D2L stock
The final TSX tech stock on my list is D2L (TSX: DTOL), which is valued at $580 million by market cap. It offers cloud-based learning software for higher educational institutions in the U.S., Canada, and other global markets.
In Q3 of fiscal 2024 (ended in October), D2L reported revenue of $46.1 million, an increase of 8% year over year. It ended the quarter with subscription sales of $41.5 million, an increase of 13% compared to the year-ago period.
DTOL explained subscription sales rose on the back of a widening customer base and higher customer spending. Its annual recurring revenue grew by 12% to $180.1 million while operating cash flow also rose 18% to $20 million, indicating a margin of over 40%.
Analysts forecast DTOL to improve adjusted earnings to $0.19 per share in fiscal 2025, compared to a loss of $0.47 per share in fiscal 2023. DTOL stock is priced at a discount of 18%, given consensus price targets.
