Ever wonder how to spot the next investment goldmine? It’s all about catching great stocks before they make their big move. While the Canadian stock market has seen a sharp rally in the last six months, with the TSX Composite Index last week posting a fresh all-time high, many attractive growth stocks still appear undervalued based on their long-term growth potential. Buying such growth stocks when they’re cheap could help you earn handsome returns in the long run.
In this article, I’ll highlight two such TSX growth stocks that look poised to boom and could deliver stellar returns in the coming years. These are the kind of stocks you’ll want to buy before they become too expensive.
Aritzia stock
Aritzia (TSX: ATZ) is the first TSX growth stock you can consider adding to your portfolio right now. If you don’t know it already, it’s a Vancouver-based integrated design house that operates an e-commerce platform and a network of boutiques in the United States and Canada. ATZ currently has a market cap of $3.8 billion as its stock trades at $34.09 per share after sliding by around 10% in the last three months.
In the fourth quarter of its fiscal year 2024 (ended in February), Aritzia reported a 7% YoY (year-over-year) increase in its total revenue to $682 million. It was the third consecutive quarter when the company’s YoY sales growth rate continued to improve. More importantly, its revenue in the United States grew positively by 9.4% last quarter, reflecting a strong market performance and potential for future expansion. Even as its e-commerce platform sales declined, Aritzia’s retail sales jumped 14.7% from a year ago in the February quarter, driven by the success of new and repositioned boutiques, showcasing its effective retail strategies.
Going forward in its fiscal year 2025 (started in March 2024), the company expects its sales growth rate to improve further, with plans for 20% to 25% YoY square footage growth. Also, the momentum in its e-commerce and the successful implementation of initiatives like “buy online and ship from store” hint towards its well-thought-out approach to capture market share both online and offline, which should accelerate its financial growth in the years to come.
BlackBerry stock
BlackBerry (TSX: BB) is another TSX growth stock that I find really attractive right now based on its long-term growth outlook, especially due to its increasing focus on artificial intelligence (AI) and machine learning-based tech solutions. This Waterloo-based company currently has a market cap of $2.5 billion as its stock trades at $4.23 per share after rising by 15% in the last three months.
Even as the ongoing macroeconomic challenges continue to affect the demand for enterprise tech solutions globally, BlackBerry’s total revenue in the last 12 months (ended in February) has jumped by 30% YoY to US$853 million. The company’s adjusted net profit for these four quarters stood strong at US$31 million, far better compared to its adjusted net loss of US$103 million in the previous four quarters.
As the demand for its AI-powered enterprise cybersecurity and Internet of Things tech solutions is expected to surge in the next decade, BlackBerry’s earnings growth trend could improve significantly and help its share prices rally.
