In April 2024, the Canadian stock market made a fresh all-time high amid growing optimism that the central banks in the United States and Canada will soon start slashing interest rates, which led to renewed buying in high-growth TSX stocks. While many investors may fear missing out on the best opportunities, others may wonder if it’s too late to join the rally and if the market is due for a correction. But the good news is that the market is always full of opportunities for investors willing to take risks and look for long-term growth potential.
In this article, I’ll highlight two high-growth TSX stocks that have the potential to deliver stellar returns over the long term, regardless of the short-term fluctuations in the market.
Aritzia stock
Whether you are investing to grow your hard-earned savings for retirement planning or to achieve your financial goals, one of the best TSX growth stocks that you should consider adding to your portfolio is Aritzia (TSX:ATZ). This Vancouver-based design house and fashion retailer offers high-quality clothing and accessories. It currently has a market cap of $3.9 billion as its stock trades at $35.30 per share after rallying by more than 60% over the last six months.
In the third quarter of its fiscal year 2024 (ended in November 2023), Aritzia reported a 4.6% YoY (year-over-year) increase in sales to $653.5 million. This growth is particularly remarkable as it builds on the significant revenue increases of 38% and 63% YoY in the same quarters of the previous two fiscal years, respectively. At the end of the quarter, Aritzia had 117 boutiques across Canada and the United States. Besides that, it runs an online platform that has seen strong growth in the last few years.
Despite the impressive revenue growth, the company experienced a decrease in net income in the last reported quarter, primarily due to strategic investments aimed at long-term growth and some short-term increases in operational costs. However, these investments are expected to pay off well in the long run as the company continues to scale and optimize its operations, especially in the United States.
Shopify stock
While it may seem like the most obvious choice for Canadian investors, Shopify (TSX:SHOP) is another high-growth stock that still holds great potential in 2024 for investors focused on long-term gains. As one of the most popular e-commerce platform providers globally, Shopify helps businesses of all sizes to start, grow, and manage their online stores. SHOP stock currently has a market cap of $126.2 billion as it trades at $99.03 per share after rallying by around 54% over the last six months.
In the quarter ended in December 2023, Shopify’s sales growth trends accelerated with stronger gross merchandise volume. During the quarter, its revenue surged by 23.6% YoY to US$2.1 billion, helping the company post strong adjusted quarterly earnings of US$0.34 per share against just earnings of US$0.07 per share a year ago. Also, the e-commerce giant’s free cash flow margin soared to 21%, reflecting its strong cash-generation capabilities.
Moreover, Shopify’s long-term growth outlook remains positive due mainly to its continuous investment in technology like artificial intelligence and machine learning and expansion into new markets. In my opinion, its strong fundamentals give SHOP stock the potential to double or even triple in value in the next few years.
