3 TSX Stocks That Destroyed Earnings Estimates

TSX stocks like Shopify stock (TSX:SHOP)(NYSE:SHOP) and these others saw a major boost after blowing past earnings estimates.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 2, 2021 9:39 am EDT

There were a lot of surprises this week with TSX stocks. For once, it was mainly good news! A wash of earnings reports came in, and there were some companies that not only performed well in the last quarter, but smashed earnings estimates. Yet with so many options, here are three that I would pay attention to.

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Shopify stock

Shopify Inc. (TSX:SHOP)(NYSE:SHOP) saw shares jump 12% in just a day after reporting strong earnings that beat out analyst estimates. The company traded around $1,400 per share, but has since been trading well into the $1,500s as of writing.

Shopify stock produced US$1.26 billion in net profit for their first quarter, crushing any analyst consensus. This came in part from the pandemic, of course, but a lot of this will continue to be recurring revenue. Revenue itself jumped 110% year over year as well, and now has about US$8 billion in cash on its balance sheet.

But should you buy? It’s always a question with Shopify stock. The company’s shares are up about 71% in the last year, but of course after five years that figure is much higher at 3,696% as of writing. If investors want an opportunity to buy in before another major boost, now is the time. Shopify stock was punished for no good reason besides a tech pull back. Once investors are back on board, the company could easily soar back to nearly $2,000 per share. That makes it one of the TSX stocks you should strongly consider.

AltaGas

It’s true, Shopify stock is expensive. So let’s look at some other major winners from the week. AltaGas Ltd. (TSX:ALA) was definitely one of them. The company is one of the biggest comebacks in the energy rebound today among TSX stocks. And after a strong earnings report that smashed estimates, now could be the time to buy.

AltaGas stock reported earnings per share of $1.29 for growth of 63% year over year, beating analysts estimates by a whopping 38%! Its normalized EBITDA meanwhile came in at $674 million, a 35% year over year increase from its solid performance.

A lot of this comes with the company relying on its utilities business during this previous downturn. Now, it has a stable balance sheet and is coming out swinging in the oil and gas rebound. After cutting AltaGas stock’s dividend to keep afloat, this latest growth suggests investors could be in for a dividend boost. So today you can lock in a share price up 45%, with a 4.51% dividend yield due to increase any second.

Canfor

I’m not sure if you’ve heard, but wood is expensive these days. Companies like Canfor Pulp Products Inc. (TSX:CFX) simply cannot produce it fast enough. This led to a surge in the price of wood, causing a major revenue boost for Canfor stock.

The company’s earnings per share growth soared back analyst estimates by 103%! The first quarter resulted in reported operating income of $4.9 million, with net income at $8.4 million. Yet even with shares up 47% as of writing, the company is still a value stock any one would want to own. It currently trades at 0.6 times sales and 1.1 times book value.

But the best part of Canfor stock is that it strives to deliver low-cost operations. The company should then be able to take full advantage of this surge in wood prices, and deliver strong revenue to shareholders. Investors today could see massive returns among their TSX stocks by buying up this stock.