Year-End Review: TSX Stocks That Outperformed Expectations in 2024

Celestica is one of two TSX stocks that have handily beat expectations this year and whose stocks are skyrocketing.

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published December 16, 2024 9:15 pm EST

| More on: CLSWELL

There’s no doubt that 2024 was a great year for the TSX. In fact, the TSX Index has rallied 22% so far this year and is trading at all-time highs. This performance has been a very welcomed surprise for many. In this article, I will discuss two TSX stocks that outperformed expectations and contributed to this stellar performance for the TSX Index.

Without further ado, let’s take a look at these two TSX stocks.

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada — Source: Getty Images

Celestica stock

Up a very impressive 275% so far in 2024, Celestica Inc. (TSX:CLS) has had a year of momentum and better-than-expected results. For example, Celestica’s “Connectivity and Cloud Solutions” (CCS) segment is benefitting enormously from the artificial intelligence, or AI, boom. Revenues in this segment have grown 39% in 2024 and at a 25% compound annual growth rate (CAGR) in the last three years.

Hyperscaler demand has continued to soar in 2024, and this has resulted in Celestica posting better-than-expected results this year. In fact, earnings per share in the first nine months of 2024 have beat expectations by almost 15%. This, along with the company’s strong growth runway, has boosted Celestica stock higher. Looking ahead, AI infrastructure investment is looking forward to a multi-year growth profile ahead of it.

In Celestica’s latest quarter, the company posted $2.5 billion in revenue. This was 22% higher than last year and above expectations. Furthermore, earnings per share (EPS) came in at $1.04, 60% higher than last year. Finally, Celestica achieved a very impressive return on invested capital (ROIC) of 29%.

Well Health Technologies stock

What’s up with Well Health Technologies Inc. (TSX:WELL)? Well, a lot. First of all, the company has been experiencing strong momentum in its business. As its technologies demonstrate the benefits of digitizing healthcare practices, demand is accelerating. For example, family practices are rapidly getting onboard, and this is resulting in greater profitability, better patient care, and greater efficiencies. As a result, Well Health stock has also been on a tear. In fact, it has sky-rocketed in 2024 and is up 80% so far in the year.

So let’s talk about how Well Health has outperformed expectations in 2024. The story at Well Health has been kind of similar for the last few years. As a matter of fact, in its latest quarter (Q3 2024), Well Health reported its 23^rd consecutive quarter of record-breaking results. Also, the company has long had a goal of hitting annual revenue of $1 billion, and this has been achieved ahead of schedule.

Finally, Well Health has raised its guidance once again in 2024, as the company’s results kept surpassing expectations. Long term, Well Health is targeting revenue of $4 billion from the Canadian primary care market. This is approximately 10 times current levels and would only represent 5% of the market.

So as you can see, the company has only scratched the surface in terms of its opportunity. Looking ahead, we can expect Well Health to continue to increase its profitability, cash flows, and shareholder returns. This is management’s stated goal, and as the company continues to achieve more scale, this is becoming increasingly likely.

The bottom line

Both Celestica and Well Health are TSX stocks benefitting from strong momentum in their respective businesses. And it looks like this momentum has a good long-term growth trajectory ahead of it for both of these companies.