Last week, Statistics Canada reported that Canada’s GDP (gross domestic product) rose 1.7% in the first quarter, which was lower than analysts’ expectation of 2.2%. Besides, the weaker manufacturing data from the United States on Monday has also raised concerns about the global economy, thus weighing on the equity markets. The S&P/TSX Composite Index is down around 1.3% this month amid broader weakness. However, long-term investors should not worry about short-term volatility and go long on quality stocks. I am bullish on these three top growth stocks currently available at attractive levels.
Docebo
Docebo (TSX: DCBO), which offers corporate e-learning solutions, has been under pressure over the last few months, losing 35.5% of its stock value compared to its 52-week high. Although the company posted an impressive first-quarter performance, its 2024 guidance has made investors skeptical. Besides, investors are worried that the challenging macro environment could lower IT spending, thus impacting the company.
However, the correction offers an excellent buying opportunity for long-term investors, as Docebo’s addressable market is expanding. More companies are including e-learning modules in their strategies due to growth in remote working and their cost-effectiveness. Besides, Docebo is adding AI (Artificial Intelligence)-powered features to its platform, which could expand its customer base. Further, the company’s multi-year contacts with its clients and higher net dollar retention rate stabilize its financials. Considering its healthy long-term growth prospects and discounted stock price, I believe long-term investors should start accumulating Docebo at these levels.
goeasy
Second on my list would be goeasy (TSX: GSY), which offers leasing and lending services to subprime customers. Although the company’s stock price has increased by 18.2% this year, its valuation still looks attractive, with its NTM (next 12 months) price-to-earnings multiple at 10.4.
Besides, goeasy is expanding its loan portfolio, which has recently surpassed $4 billion. Its retail network of more than 400 locations, online lending platforms, and point-of-sale financing offered in several verticles, including retail, automotive, home improvement, and healthcare, have helped the company expand its loan portfolio. Meanwhile, the company’s management expects its loan portfolio to reach $5.8 to $6.2 billion by 2026, with the midpoint representing a 50% increase from its current levels. The expansion could boost its financials.
goeasy also rewards its shareholders with consistent dividend growth. Since 2014, the company has raised its dividends at an annualized rate of around 30%. Meanwhile, its forward yield stands at 2.5%.
BlackBerry
Another growth stock that is trading at a substantial discount is BlackBerry (TSX: BB), which has lost over 50% of its stock value compared to its 52-week high. Due to the lower-than-expected growth in its IoT (Internet of Things) sector, the company has been under pressure. Amid the steep correction, the company’s NTM price-to-sales multiple has declined to 2.7.
However, BlackBerry’s long-term growth prospects look healthy as demand for next-generation software-defined vehicles grows. Besides, its royalty backlog from new design wins, innovative product launches, and strategic partnerships could support its growth. Further, the company’s expanded product offerings and blue-chip customer base could help overcome the near-term weakness in the cybersecurity segment and drive its financials in the coming quarters. So, despite the near-term volatility, investors can buy the stock to earn multi-fold returns in the long run.
