Lightspeed Commerce (TSX:LSPD), WELL Health Technologies (TSX:WELL), goeasy (TSX:GSY) and Aritzia (TSX:ATZ) could be some of the strong Canadian growth stocks to buy this week, albeit for different respective reasons. Let’s take a closer look.
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Lightspeed Commerce stock
Lightspeed Commerce is a growth stock with a historical average monthly return of 9.5% for August achieved since its initial public offering (IPO) in 2019. A short seller attack and the subsequent sell-off in late 2021 could have dampened investor enthusiasm in the omnichannel commerce technology stock, but it didn’t kill management’s resolve to grow revenue at double-digit rates and turn the business into a profit-making enterprise. The market’s love for LSPD stock could return.
Last week, Lightspeed reported 20% year-over-year growth in quarterly revenue for the three months to June 30, 2023. Quarterly revenue at $209.1 million exceeded management’s expectations as gross payment volumes (GPV) surged by 56% year over year. Operating losses have narrowed lately, and the company could be on course to operationally break even next year – its first-ever lossless year since going public.
LSPD stock trades 86% below its all-time highs, and shares seem to be in a recovery mode following a sustained 15% year-to-date gain. Investors could see more upside as a leaner Lightspeed turns profitable over the next 12 months.
WELL Health Technologies
WELL Health Technologies is a $1 billion Canadian healthcare and technology-propelled growth stock to watch or buy this week as it makes significant revenue and earnings growth strides.
In a pre-earnings report released on August 3, organic growth and accretive acquisitions combined to propel WELL Health Technologies to a record 1 million patient visits during the second quarter. Patient interactions with the firm’s facilities, including its technology platforms, surged by 17% year over year. The company should report record revenues and significant profitability improvements in its earnings results this week.
Bay Street analysts project strong 61% growth in WELL Health’s earnings per share for this year.
Most noteworthy, if artificial intelligence (AI) proves to be a big thing over the coming years, WELL stock is a potential Canadian AI stock to hold as it builds a portfolio of helpful artificial intelligence tools that may radically improve the way healthcare is delivered to patients globally. WELL’s strategic investments in AI make it a futuristic stock.
Shares are up 55.3% year to date. However, at $4.51 per share, WELL stock traded 52% below its all-time high at the time of writing. The company could be at the forefront of changing global healthcare. However, its common shares trade cheaper than they did a couple of months ago.
goeasy
Financial services firm goeasy is another compelling rebound play for growth-oriented investors this week. Following an 18% one-month return and a respectable 26.5% total return so far this year, GSY stock has been friendly to investor portfolios. Momentum is positive, and goeasy’s shares remain undervalued relative to the broader stock market.
The company’s fast-growing lending business should remain fortified as the Canadian economy remains resilient and a feared recession remains at bay.
Most noteworthy, shares could be grossly undervalued. GSY stock trades at a forward price-to-earnings (P/E) multiple of 8.1 while industry peers trade at an average of 21.6 times the last 12 months’ earnings.
Bay Street analysts project a near 12% average earnings per share growth rate over the next five years. Value investing legend Peter Lynch “preached” that a fairly valued stock should have a forward PE that matches its expected earnings growth rate (or a price-earnings-to-growth (PEG) multiple of 1). goeasy’s PEG could hover below 0.7 – implying potential undervaluation for the growth stock at current prices this week.
Aritzia
Growth stocks can have their moments of severe weakness, and Aritzia is currently on its lows. The $2.1 billion exclusive fashion brands’ stock has lost 51% of its value so far this year to hit new 52-week lows as recession fears grip the consumer cyclical sector’s investor base. ATZ stock could reprice higher once the recession talks die down.
The company reported 13.4% year-over-year growth in its most recent quarterly revenue despite seeing a more challenging consumer environment as it scales up its footprint to meet growing customer demand.
ATZ stock trades cheaply at 1.2 times the company’s annualized sales while apparel industry stocks trade at a higher average price-to-sales multiple of 1.8.
