3 Top TSX Growth Stocks to Buy for December

High-growth TSX stocks such as Lightspeed should help you generate market-beating returns over time.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While index investing is among the most popular ways to build long-term wealth, you can consider allocating a small portion of your equity portfolio toward individual growth stocks. In the last two years, growth stocks across sectors have fallen off a cliff and trade at a massive discount compared to historical valuations and consensus price target estimates.

Typically, growth stocks trail the broader indices by a wide margin during bear markets and generate outsized gains when market sentiment improves. As timing the market is impossible, every major valuation dip should be viewed as a buying opportunity by long-term investors.

Here are three top TSX growth stocks you can consider buying in December 2023.

Created with Highcharts 11.4.3Lightspeed Commerce + Descartes Systems Group + Kinaxis PriceZoom1M3M6MYTD1Y5Y10YALL24 Nov 202124 Nov 2023Zoom ▾Jan '22Apr '22Jul '22Oct '22Jan '23Apr '23Jul '23Oct '23www.fool.ca

Lightspeed stock

Down 86% from all-time highs, Lightspeed Commerce (TSX:LSPD) is valued at $3.4 billion by market cap. It offers cloud-based software subscriptions and payment solutions for small and medium businesses such as retailers, restaurants, and golf course operators.

Despite an uncertain macro environment, Lightspeed increased revenue by 25% year over year in the second quarter (Q2) of fiscal 2024 (ending in March). The company emphasized its flagship retail and restaurant offering gained significant traction among customers and accounts for a third of customer locations.

Its GPV (gross payment volume) also rose to US$5.9 billion, with 25% processed through Lightspeed Payments. Lightspeed reported its first quarter of positive adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and is on track to break even through fiscal 2024.

Kinaxis stock

Valued at $4.3 billion by market cap, Kinaxis (TSX:KXS) offers tech-powered supply chain solutions to enterprises. It ended Q3 of 2023 with annual recurring revenue or ARR of $304 million, an increase of 18% year over year.

Kinaxis explained the demand for its products and progress on several early-stage growth strategies allow it to make strategic investments in go-to-market activities.

It expects to end 2023 with sales between $425 million and $435 million, while EBITDA margin is forecast at 17% at the midpoint.

Down 34% from all-time highs, KXS stock is priced at 54 times forward earnings, which is quite expensive. But analysts remain bullish and expect shares to surge by more than 60% in the next 12 months.

Descartes stock

The final TSX growth stock on my list is Descartes Systems (TSX:DSG), another cloud-based logistics and supply chain solutions company. Its Logistics Technology platform offers a range of wireless logistics management solutions that include routing, mobile, and telematics, in addition to transportation management, e-commerce shipping, and fulfillment.

Descartes has a subscription-based business model, allowing it to generate stable cash flows across business cycles. Moreover, its profit margins are over 20%, which suggests Descartes consistently generates close to $200 million in cash flows each year.

Descartes ended the last quarter with a net cash balance of $227 million, providing it with the flexibility to target accretive acquisitions and accelerate top-line growth.

Unlike most other tech stocks, Descartes is trading close to its record highs. It has returned over 650% to shareholders in the past decade, easily outpacing the broader index.

Priced at 60 times forward earnings, DSG stock is quite expensive. But a quality growth stock commands a premium multiple.

Should you invest $1,000 in BCE right now?

Before you buy stock in BCE, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and BCE wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,750.10!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the Top Stocks * Returns as of 1/22/25

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Descartes Systems Group, Kinaxis, and Lightspeed Commerce. The Motley Fool has a disclosure policy.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Tech Stocks

data center server racks glow with light
Tech Stocks

Why Hive Could Be the Best Stock to Buy in January 

Bitcoin is trading at its all-time high. However, Hive’s stock continues to trade in the lower range, creating a buying…

Read more »

Rocket lift off through the clouds
Tech Stocks

Could MDA Stock Deliver Big Returns Over the Next 5 Years?

Besides surging demand for space technology, its proven execution capabilities could help MDA Space stock deliver solid returns over the…

Read more »

e-commerce shopping getting a package
Tech Stocks

Why Shopify Could Be the Hottest TSX Stock in 2025

Shopify (TSX:SHOP) stock could lead the TSX higher this year!

Read more »

think thought consider
Tech Stocks

Where Will Celestica Stock Be in 3 Years?

Here’s why I wouldn’t be surprised if Celestica stock maintains its solid upward trajectory over the next three years.

Read more »

Investor wonders if it's safe to buy stocks now
Tech Stocks

Billionaires Are Dropping Apple Stock and Buying This TSX Stock in Bulk

Let's be clear: there's nothing wrong with Apple stock. But investors may not get the value they can from this…

Read more »

data center server racks glow with light
Tech Stocks

OpenText Stock: Buy, Sell, or Hold in 2025?

OpenText is a TSX tech stock which trades at a cheap multiple while offering a tasty yield to shareholders in…

Read more »

Income and growth financial chart
Tech Stocks

This TSX Stock Has Already Soared 151%: Can it Double in 2025?

Whether MDA stock doubles again in 2025 will depend on consistent execution and broader market conditions, but it certainly seems…

Read more »

e-commerce shopping getting a package
Tech Stocks

Opinion: This Is the Only TSX Growth Stock to Own for the Next 5 Years

Here's why Shopify (TSX:SHOP) looks like a top growth stock worth owning over the next five years on a relative…

Read more »