For investors looking for top tech stocks to buy in the Canadian market, there are certainly quite a few options to choose from. While some are better than others, I think focusing on top- and bottom-line growth is important. These three companies resemble the sorts of high-growth names with decent upside over the long term that I think may be worth taking a stab at.
Now, these growth stocks carry a significant amount of risk. Investors can be blindsided by a myriad of factors, from macro-specific headwinds to sector-wide issues. However, I think over the very long term, these stocks may be worth considering.
Without further ado, let’s dive into these names.
Celestica
I’ve been critical of Celestica (TSX: CLS) in the past, mostly due to the company’s seemingly always high valuation. However, at only 22 times earnings, that’s a relative steal compared to most other high-growth tech stocks in the market.
Celestica’s business model is focused on providing supply chain solutions to its corporate clientele. The company operates in two segments: Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS). Celestia operates in North America, Asia and Europe, helping to solve complex technology challenges. The company partners with its customers to design and create innovative solutions to support their complex products across various markets.
The company’s recent quarterly results were very strong, with the company bringing in $2.2 billion in revenue. That’s good for a 20% increase year over year. Importantly, the company also showcased a Non-international financial reporting standards operating margin of 6.2%, a 100 basis point rise from the previous year’s 5.2%. This company’s growth profile remains strong and should improve as corporate software spending grows.
Tucows
Tucows (TSX: TC) is a company I don’t cover often, but it’s one I’ve started to consider. The company is a leading mobile technology, domain name, network access and email services provider. Tucows operates through an international network of Internet service providers and web hosting companies. Headquartered in Ontario, Canada, Tucows Inc. operates its business in North America and Europe.
Like Celestia, the company’s recent quarterly results were strong. For the first quarter of 2024, Tucows reported consolidated net revenue of US$87.5 million, representing 8.7% year-over-year growth. Perhaps more notably, the company’s gross profit increased by 30% to US$18.3 million. Moreover, the company’s adjusted earnings before interest, taxes, depreciation, and amortization increased to US$4.2 million, a rise of 38.7% in the first quarter of 2024.
All such financial growth factors allow Tucows to offer higher dividend yield to its investors. Hence, I think right now is a great time to consider adding exposure to this tech stock.
Dayforce
Dayforce (NYSE: DAY) is a Canada-based human capital management software company. The company operates domestically, and has a presence in the U.S., New Zealand, and Australia. The company offers a HCM cloud suite that combines human resources, benefits, payrolls, talent management and workforce management services. Dayfore primarily provides service to the retail hospitality, financial and healthcare services sectors.
On May 1, Dayforce published its financial reports for the first quarter of 2024. The report highlighted its total revenue increased by 16.4% to $431.5 million, and recurring revenue increased by 24.3% to $337.2 million. In addition, the company plans to expand its operations in Ireland, where it will configure plans and options for employees.
Dayforce also aims for positive growth in the future, helping it to offer higher dividend yields to its investors.
