A bull run occurs when equity markets continue to rise for an extended period. This article will examine three discounted stocks that can outperform in the next bull run. Higher growth prospects and cheaper valuations could support the upward momentum in these three stock prices.
WELL Health Technologies
WELL Health Technologies (TSX: WELL) has been under pressure over the last few months following a decline in its fourth-quarter net income and underwhelming 2024 guidance. The company has lost around 40% of its stock value compared to its 52-week high. Amid the sell-off, the company trades at 0.9 times its projected sales for the next four quarters.
Meanwhile, WELL Health has adopted a cost-optimization program, which can improve its operational efficiency and drive profitability. Besides, the company has continued its expansion by signing an agreement to acquire 10 primary care medical clinics in Ontario and British Columbia. The company is also developing AI-powered products (artificial intelligence) and services that would aid healthcare professionals in delivering positive patient outcomes. These growth and cost-optimization initiatives could boost its financials in the coming quarters, thus making it an attractive buy at these levels.
Lightspeed Commerce
Another discounted stock I am bullish on would be Lightspeed Commerce (TSX: LSPD), which supports small- and medium-scale enterprises by unifying their physical and online businesses. It also offers financial solutions and aids in connecting with supplier networks. Lightspeed has been under pressure over the last few months amid management’s cautious outlook and uncertain macro environment. It has lost over 36% of its stock value compared to its 52-week high. Amid the recent correction, the company’s valuation looks attractive, with its NTM (next 12 months) price-to-sales multiple at 2.
Meanwhile, Lightspeed has undertaken reorganization and cost-reduction initiatives to support the next phase of its profitable growth strategy. It has slashed 10% of its headcount and integrated its acquisitions into two flagship products, which could lower its expenses. Besides, the growing adoption of Lightspeed Payments and expanding it to new markets could continue to drive its GPV (gross payment volume) as a percentage of GTV (gross transaction value). Further, the expanding customer base, rising ARPU (average revenue per user), and growing transition of customers towards higher GTV customer locations could boost its financials in the coming quarters.
Considering its growth prospects and attractive valuation, Lightspeed Commerce would be an excellent buy for the next bull run.
BlackBerry
My final pick would be BlackBerry (TSX: BB), which provides cybersecurity solutions to organizations and governments worldwide to safeguard their IoT (Internet of Things). Earlier this month, the company reported a stellar fourth-quarter performance for fiscal 2024, with its topline growing by 14.6%. The growth across three segments drove its revenue. Its IoT segment posted a 24.5% increase, while the revenue from the cybersecurity segment grew by 4.5%. Its QNX royalty backlog stood at $815 million, a 27% year-over-year increase amid design wins.
Meanwhile, I expect the growth to continue amid growing awareness about vehicle safety, thus raising the demand for the Advanced Driver Assistance Systems platform. Besides, BlackBerry continues to launch new innovative products and make strategic partnerships that could support its growth in the coming quarters. Meanwhile, BlackBerry’s management expects a substantial improvement in its cash flows and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in fiscal 2025. Considering all these factors, I believe BlackBerry, which has been under pressure over the last few years, would be an attractive buy right now.
