Much ado has been made of some of the top U.S. growth stocks in the market, with investors all around the world largely continuing to flock to this particular sub-set of the growth stock space as the place to invest long-term. That’s a fair view, considering how these companies have performed.
With that said, I’m going to highlight three top Canadian growth stocks I think investors should consider as well. As a function of being based outside of the United States, these companies are ones I’d consider under-the-radar gems investors may be overlooking right now.
So, for those looking for the best risk/reward upside in a market that remains very uncertain, here are three top ideas to kick off November.
Source: Getty Images
Docebo
One top Canadian growth stock I don’t talk about enough (but probably should) is Docebo (TSX:DCBO).
This AI-driven learning management software provider has seen its share price decline rather precipitously of late, in part due to a broader macro discussion around the viability (and future profitability) of any company that ties itself closely to AI.
The thing is, Docebo has continued to post very strong results. The company’s most recent Q3 earnings saw revenue grow 11% to more than $61 million (beating expectations), while profitability also surged more than 20% year-over-year. Despite these factors, and a net margin that’s close to 10% (pretty decent in this sector), Docebo is a stock that feels like it’s being left for dead.
For investors who believe the learning management space is one that will see robust growth over the long term, this company with strong earnings momentum and some AI upside certainly looks like it’s worth a look at current levels.
Shopify
Shopify (TSX:SHOP) continues to be a table-pounder for me, and for good reason.
As the company’s chart above shows, it’s been a rather positive ride for investors who took my advice and bought this stock near the 2022 lows, when all hope seemed to be gone for a long-term rebound to new all-time highs.
Now the most valuable company in Canada by market capitalization, once again, Shopify does appear to be firing on all cylinders. With revenue growth of 32% this past quarter and a free cash flow margin of a whopping 18%, there’s not a lot investors can point to as a reason to sell right now.
Adoption remains high for Shopify’s core e-commerce platform, and I think this adoption should ramp up as companies everywhere look for the most efficient ways to reach end users and consumers.
Kinaxis
Last, but certainly not least on this list of top Canadian growth stocks to buy is Kinaxis (TSX:KXS).
Shares of the SaaS and AI-powered supply chain solutions company have traded within a relatively narrow band, at least for the past five years. Accordingly, this is a stock chart that may indicate there’s not much growth taking place here, or this is a stock the market can’t make its mind up on. I’ll take the latter view, at least for now.
That’s because there’s plenty of growth to be had when it comes to Kinaxis. SaaS revenue grew by more than 17% this past quarter, with the most impressive figure being Kinaxis’ net profit growth (150% year-over-year), which one may have assumed would have led to strong share price growth, which it didn’t.
If there’s one company on this list that appears best-positioned for a major breakout, it’s Kinaxis. I’m watching all three, but this is a stock I think is due for a bump, if the market can catch on.
