On Tuesday, the Labor Department of the United States announced the Consumer Price Index rose by 4% in May compared to the previous year. It was the slowest year-over-year increase since March 2021. The easing inflation has raised investors’ hopes that the Federal Reserve would soften its monetary tightening initiatives. The easing fears over the United States banking crisis have improved investors’ sentiments, driving the equity markets higher. The S&P/TSX Composite Index is up 3.3% for this year.
Amid improving investors’ sentiments, here are three high-growth stocks that you can buy for under $55 to earn multi-fold returns in the long run.
Nuvei
Nuvei (TSX:NVEI) is a fintech company that facilitates its clients to accept next-gen payments. It has made a solid beginning to 2023 by posting an impressive first-quarter performance last month. Its total volume and revenue grew by 45% and 20%, respectively. Substantial organic growth drove its top line. However, a decline in digital assets and unfavourable currency translation offset some of its growth. Meanwhile, its adjusted net income fell $4.6 million to $64.5 million.
Meanwhile, the company is strengthening its product offerings with innovative product launches. It is also extending its geographical reach and adding alternative payment methods, which could boost its financials in the coming quarters. Amid these growth initiatives, the company’s management expects its revenue to grow 20% annually in the medium term. The management also hopes to achieve an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margin of 50% in the long run.
Despite its healthy growth prospects, Nuvei has lost approximately 33% of its stock value compared to its March highs. The selloff offers an excellent buying opportunity for long-term investors.
BlackBerry
Given its IoT (Internet of Things) exposure, I am selecting BlackBerry (TSX:BB) as my second pick. Meanwhile, Markets and Markets project the global automotive IoT market to grow at a CAGR (compound annual growth rate) of 19.7% through 2028. The rising adoption of electric and hybrid vehicles and increased implementation of advanced and safety features could drive the expansion.
Amid the expanding addressable market, design wins and the development of new innovative products could drive BlackBerry’s financials in the coming years. The company’s management expects its IoT revenue to grow at 18-22% CAGR through 2026. The management also hopes to increase its revenue from the cybersecurity segment at a rate of 9-12%, despite growing competition. The company’s total revenue could rise by 12-15% annually through 2026.
Supported by its top-line growth, the company’s gross margin could also expand by 200 basis points annually through 2026. BlackBerry’s management is confident of posting positive adjusted EPS (earnings per share) for fiscal 2025. So, I believe BlackBerry, which is trading at a discount of 25% from its 52-week high, would be an excellent buy for investors with over three years of investment horizon.
Docebo
Docebo (TSX:DCBO), which specializes in learning management systems, is my final pick. Supported by its artificial intelligence-powered learning platform, the company allows its customers to scale and personalize the learning experience to their audiences. It reported an excellent first-quarter performance last month, with its revenue growing by 29%. The expansion of its customer base and increase in average contract value drove its top line. Its adjusted net income came in at $3.2 million compared to a loss of $1.8 million in the previous year’s quarter.
Meanwhile, I expect the uptrend in the company’s financials to continue as the global LMS (learning management software) market could grow at a CAGR of 18% through 2027. Most of the company’s clients have signed multi-year contracts, which offer stability to its financials. So, considering all these factors, I am bullish on Docebo.
