Lower inflation numbers in the United States have eased recession fears, driving the Canadian equity markets. The S&P/TSX Composite Index rose around 5% compared to last week’s low and is trading 8.6% higher for the year. The index is just 1.9% lower than its all-time high.
Despite improving investors’ confidence, some TSX stocks are under pressure and have lost substantial value compared to their 52-week highs. The following two stocks have lost over 25% of their stock value compared to their 52-week high. However, given their long-term healthy growth prospects and discounted stock prices, investors should look to accumulate these stocks to earn superior returns in the long run.
Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD), which offers commerce solutions to a wide range of businesses, reported impressive first-quarter earnings for fiscal 2025 earlier this month. In the June-ending quarter, it posted revenue of $266.1 million, representing a 27% increase from the previous year’s quarter. Expanding average revenue per user from $383 to $503 and new customer wins boosted its sales. Its net losses also declined from $48.7 million to $35 million. Meanwhile, removing one-time or special expenses, its adjusted net income stood at $16.1 million, representing a substantial increase from a loss of $2.2 million in the previous year’s quarter.
After reporting better-than-expected first-quarter earnings, Lightspeed’s management raised its 2024 guidance. The management now expects its top line to grow by 20% this fiscal year while generating an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $45 million. Its solid first-quarter earnings and raising of management’s guidance have failed to inspire investors as the company trades around 38% lower compared to its 52-week high. Amid the steep correction, it trades at an attractive NTM (next 12 months) price-to-sales multiple of 1.7.
Meanwhile, Lightspeed’s long-term growth prospects look healthy as the growing adoption of omnichannel selling has created multi-year growth potential for the company. Besides, the company is developing several innovative products and is focusing on expanding its unified POS (point of sales) and payments offering, which could support its growth in the coming years. Also, its reorganization and cost-cutting initiatives could improve its profitability. Considering its healthy growth prospects and discounted stock price, I believe investors with longer horizons should look to accumulate the stock to earn multi-fold returns in the long term.
Docebo
Another TSX stock that trades at a substantial discount compared to its 52-week high would be Docebo (TSX:DCBO), which offers corporate e-learning solutions to academics and enterprises. It reported an impressive second-quarter performance, with its revenue growing by 22% to $53.1 million. The net addition of 307 customers over the last four quarters and an increase in average contract value from $48,148 to $52,822 boosted its sales. Along with top-line growth, its adjusted EBITDA and EPS (earnings per share) grew by 158% and 85.7%, respectively.
Supported by its solid second-quarter performance, Docebo’s management raised its 2024 guidance. The management expects its 2024 revenue to grow by 18-19% while its adjusted EBITDA margin would be around 15-15.5%. Besides, the increased usage of digital learning solutions has created long-term growth potential for the company, which continues to launch artificial intelligence-powered products and make strategic partnerships. So, I expect the momentum in Docebo’s financials to continue.
Although Docebo’s stock price has increased by 13.2% since reporting its second-quarter earnings, it trades at a 25% discount compared to its 52-week high, making it an excellent buy right now.
