The key rule of investing in the equity markets is to buy low and sell high. The ongoing pullback in the Canadian stock markets allows you to buy the dip and gain exposure to quality TSX stocks trading at a discount. In this article, I have identified two top TSX stocks you can buy in April 2025 and benefit from outsized gains.
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Is the TSX stock a good buy?
In 2024, Magellan Aerospace (TSX:MAL) reported a revenue of $879.6 million, an increase of 7.1% yearly, as the aerospace industry continues recovering from years of turbulence. Net income surged to $35.5 million, significantly higher than the $9.2 million reported in 2023.
The diversified aerospace component supplier navigated persistent industry challenges, including supply chain delays, labour shortages, and market disruptions, such as the Boeing machinist strike in 2024.
Despite these headwinds, Magellan has successfully improved commercial terms across most of its contract portfolio, with only a few agreements remaining to be renegotiated in 2025.
“With a strengthened business climate and a revitalized strategic plan, our executive leadership team remains committed to leveraging Magellan’s core strengths and capabilities for sustained growth,” the company stated in its annual report.
Magellan’s business mix showed a slight shift toward commercial markets, which accounted for 65% of 2024 revenue (up from 63% in 2023), while defence markets represented 35%.
It secured several key contracts, including an agreement with Airbus to supply structural wing components for single-aisle aircraft and a five-year deal with Peraton to provide Black Brant vehicles and hardware for NASA’s Sounding Rocket Program, potentially worth up to $75 million.
Industry-wide travel increased 8.6% year-over-year by December 2024, according to the International Air Transport Association. Moreover, Boeing and Airbus ended the year with record order backlogs of 6,245 and 8,658 aircraft, respectively.
Analysts tracking the TSX stock expect adjusted earnings per share to expand from $0.62 in 2024 to $1.53 in 2026. Further, its dividend per share is on track to increase from $0.10 to $0.27 in the next two years.
If Magellan is valued at 20 times trailing earnings, which is reasonable, the stock should more than double over the next 24 months.
Is this TSX tech stock undervalued?
Shopify (TSX:SHOP) is a tech stock that is down 45% from its all-time high. In 2024, it reported a revenue of US$8.98 billion, up 26% year over year, as the commerce platform continues to expand its merchant base across more than 175 countries.
Shopify explains its growth was fueled by subscription solutions, which grew 28% to US$2.4 billion, and merchant solutions, which increased 25% to US$6.5 billion. Merchant solutions now account for 74% of total revenue, driven by payment processing and currency conversion fees from Shopify Payments.
“We believe that our future success depends on many factors, including our ability to expand our merchant base, localize features for specific geographies, and leverage emerging technologies, including AI,” the company stated in its annual report.
Monthly recurring revenue, a key performance indicator for the platform, reached US$178 million as of December 31, 2024, up 24% year over year. Meanwhile, gross merchandise volume increased 24% to US$292.3 billion.
Shopify’s merchant base is geographically diverse, with 45% in the United States, 30% in Europe, the Middle East, and Africa, 15% in Asia Pacific, Australia, and China, 5% in Canada, and 5% in Latin America.
In 2025, Shopify is focused on AI-powered solutions, including Shopify Magic and Sidekick, an AI commerce assistant, to help merchants increase productivity and streamline operations.
Shopify’s growth story is far from over, given its forecast to increase sales from US$8.88 billion in 2024 to US$23.4 billion in 2029. Comparatively, free cash flow (FCF) is forecast to improve from US$1.6 billion to US$5.48 billion in this period.
If the tech stock is priced at 40 times forward FCF, it should more than double from current levels in the next four years.
