A bull market is a great time to invest in the stock market. Due to improved market sentiment and the possibility of sustained economic growth, the stock market generally delivers inflation-beating returns in a bull run.
Long-term investors can consider gaining exposure to quality growth stocks in a bullish market. Typically, growth stocks generate outsized gains and beat the broader markets by a wide margin during bull runs. Here are three quality growth stocks you can buy with $10,000 right now.
Shopify stock
Down 52% from all-time highs, Shopify (TSX: SHOP) stock trades at a market cap of $131 billion. Operating in the e-commerce segment, Shopify allows merchants to quickly set up an online presence. Founded in 2006, Shopify continues to widen its portfolio of products and solutions.
For instance, it allows developers to add multiple payment options and create inventory tracking tools, design templates, and data-powered dashboards, all of which result in higher engagement rates. More than two million merchants use Shopify and the Canadian tech giant controls 30% of the e-commerce platform market in the U.S.
While Shopify’s top-line growth has decelerated in recent years, it is forecast to grow sales by 21% to $11.6 billion in 2024 and by 20% to $13.8 billion in 2025. Comparatively, adjusted earnings per share are forecast to grow by 91% annually in the next five years.
Given these estimates, Shopify should end 2028 with adjusted earnings of $25 per share. If the stock is priced at 30 times forward earnings, it should trade around $750, indicating an upside potential of more than 600% from current levels.
Payfare stock
A small-cap stock with massive upside potential, Payfare (TSX: PAY) is trading 52% from record highs, allowing you to buy the dip. Payfare is a fintech company that powers instant payout and digital banking solutions for the gig workforce.
It ended 2023 with 1.4 million active users, an increase of 33% year over year, and is forecast to increase sales from $130 million in 2022 to $235 million in 2024.
Unlike several other growth stocks, Payfare reports consistent profits and is on track to end 2024 with adjusted earnings of $0.58 per share, compared to a loss of $0.06 per share in 2022.
Priced at 11 times forward earnings, Payfare stock is quite cheap and trades at a discount of 60% to consensus price target estimates.
Enghouse Systems stock
The final TSX stock on my list is Enghouse Systems (TSX: ENGH), which also offers shareholders a tasty dividend yield of 3.4%. It reported revenue of $120.5 million in the fiscal first quarter (Q1) of 2024 (ended in January), up from $106.4 million in the year-ago period. Enghouse’s recurring revenue rose 27.2% to $84.6 million, accounting for 70% of total sales.
A widening base of recurring revenue should help Enghouse generate stable cash flows across market cycles and maintain its dividend payout. Enghouse Systems emphasized recurring revenue accounts for an increasing proportion of sales as the software market transitions towards software-as-a-service-based offerings.
A debt-free balance sheet makes Enghouse immune to interest rate hikes. Further, the company ended Q1 with $247.4 million in cash providing it with the flexibility to fund its growth plans.
