3 High-Growth TSX Stocks That Dropped up to 50% Recently

Although TSX stocks at large are trading close to all-time highs, some rallying Canadian names remarkably floundered recently.

| More on:

Although TSX stocks at large are trading close to all-time highs, some rallying Canadian names have remarkably floundered recently. Is it time to buy those beaten-down stocks?

Shopify

Canadian tech titan Shopify (TSX:SHOP)(NYSE:SHOP) has been trading quite weak for the last few weeks. It has fallen more than 30% since its all-time high of $1,900 in February.

Valuation concerns could be one of the reasons behind Shopify’s recent fall. However, investors should note that Shopify’s growth prospects remain intact, despite its recent drop. The correction could be an excellent buying opportunity for long-term investors.

The e-commerce giant recorded the best ever quarter recently, with its Q1 revenues growing by 110% year over year. I think the stock has significant growth potential despite its lofty valuation multiple.

Shopify’s expanding product base and merchant growth should see stronger revenue growth for the next several quarters. The company might not double its top line every year as it did during the pandemic, but it will still see superior growth compared to peers.

Facedrive

Another high-growth stock that has been on a downtrend recently is Facedrive (TSXV:FD). The ride-sharing company stock has fallen almost 40% so far in Q2 and 76% since its record high in February 2021.

Facedrive, the “people-and-planet-first” company, seems to have gotten carried away in order to expand since last year. The company has expanded in multiple non-relevant areas like marketplace, food delivery, and health. How the company grows its core ride-sharing business amid all these latest verticals remains to be seen. Its financial picture is no respite to shareholders, as it continues to lose money. Facedrive reported a net loss of $17.8 million in 2020 compared to $6.9 million in 2019.

FD stock still looks immensely overvalued even after such a steep correction recently. More reliable revenue growth and management’s outlook to profitability could drive the stock higher. However, both seem out of place at the moment. Uncertainties and valuation concerns could weight on FD stock in the short to medium term.

Maxar Technologies

Maxar Technologies (TSX:MAXR)(NYSE:MAXR) stock got destroyed last week. The stock plunged more than 35% since reporting weaker Q1 earnings last week. The stock has lost 52% since its yearly highs of $74 in January 2021.

The space technology company reported a net loss of US $1.3 per share for the quarter ended on March 31, 2021. This was quite a widening from the loss of $0.80 per share in Q1 2021. The results were negatively impacted by a failure of the SiriusXM satellite launched in December last year.

Growth stocks have come under immense pressure recently due to inflation worries. Notably, Maxar stock is still sitting on a handsome gain of 130% in the last 12 months, even after the recent correction.

Interestingly, Maxar stock looks appealing from the valuation standpoint after this drop. It is trading at a price-to-sales valuation of one, notably lower than the historical average. The discounted valuation indicates that the stock might have a limited downside from the current levels.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned. The Fool owns shares of Shopify. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.

More on Tech Stocks

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

money goes up and down in balance
Tech Stocks

1 “Magnificent 7” Stock I’d Buy Over Nvidia Right Now

Here's why Meta Platforms stock is a better choice for Canadian investors compared to Nvidia in November 2024.

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

OpenText stock has fallen in the last few years, but that could mean this top tech stock remains an undervalued…

Read more »

AI microchip
Tech Stocks

Celestica Stock: Buy, Sell, or Hold?

Celestica's stock price has rallied 950% in the last five years. Will the AI boom send it even higher in…

Read more »

data analyze research
Tech Stocks

2 Ridiculously Cheap Growth Stocks to Buy Hand Over Fist in 2024

Well Health Technologies is a cheap growth stock to buy for its record-breaking results, massive revenue growth, and profitability.

Read more »