3 Tech Stocks You Can Buy and Hold for the Next Decade

Are you looking for Canadian tech stocks that could be multi-baggers in the decade ahead. Here are three small-cap stocks with big potential!

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Tech stocks continue to be extremely hot in both the Canadian and American stock markets. Many top tech stocks are trading near 52-week or all-time highs. Many of their valuations are starting to look stretched, so it can be a bit challenging to find opportunities today.

Fortunately, there are still some good buys, especially in the small- to mid-cap space. If you are looking for some quality tech stocks to hold for the decade ahead, here are three to look at today.

A small-cap healthcare tech stock

VitalHub (TSX:VHI) has had a huge run since the start of the year. Its stock is up 43% this year and 113% over the past 52 weeks. Despite its strength, one could argue that it still looks like a decent buy.

It only trades with a forward enterprise value-to-EBITDA (earnings before interest, tax, depreciation, and amortization) of 15.7 times. VitalHub has grown revenues and EBITDA by a respective compounded annual growth rate (CAGR) of 51% and 124% over the past three years. It is not cheap like it was a few months ago, but its price to growth is still attractive.

The company provides mission-critical patient care and health record software for the healthcare industry. The company has steadily been building out platforms in Canada, the U.K., Europe, the Middle East, and Australia.

While it has a strong organic software development capability, it has also made some very smart acquisitions. VitalHub has a high recurring revenue base, and its margin profile has consistently been improving. With a market cap of $260 million, there is still substantial upside ahead for this tech stock.

An essential software provider

Another tech stock worth a long-term hold is Sylogist (TSX:SYZ). Like VitalHub, Sylogist is a small-cap stock. It only has a market cap of $211 million. However, it, too, has had a strong run in 2024. Its stock is up 20% this year.

Sylogist provides enterprise resource planning software for the charitable, educational, and public sectors. This is mission-critical software that tends to be essential and extremely sticky to its customers.

These markets are very collegial. Once it wins a customer, word travels fast, and it is likely to win more business in the future.

The company has been ramping up its sales funnel and investing to grow its software applications. It has several market-leading solutions, so it is primed to take market share. This tech stock trades at a fraction of other peers. Its valuation has good potential to re-rate upward if it can continue its organic growth trajectory.

A diversified tech stock

Calian Group (TSX:CGY) is a final tech stock that could deliver solid long-term returns. It operates a mix of verticals across healthcare, training, cybersecurity, and satcom/advanced technologies.

The company has a strong mix of government and private clients. Calian has steadily grown its backlog, and that helps provide relative certainty for future revenues. Calian has grown revenues and EBITDA by a mid- to high-teens compound annual rate over the past five years.

2023 was a bit of a weak year. However, it expects to make it up in 2024. It is currently guiding to about 30% EBITDA growth in 2024.

Calian only trades with a forward enterprise value-to-EBITDA ratio of eight and a price-to-earnings ratio of 13. If the company can hit its guidance, it could be a solid bargain to buy right here. It only has a market cap of $700 million, but it could deliver solid teens returns in the coming years.

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 Robin Brown has positions in Calian Group and Vitalhub. The Motley Fool has positions in and recommends Sylogist and Vitalhub. The Motley Fool recommends Calian Group. The Motley Fool has a disclosure policy.

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