Top 3 stocks that could beat Shopify (TSX: SHOP) next year


Shopify (TSX: SHOP) (NYSE: SHOP) has arguably been Canada’s most successful tech stock of the past decade. If you were lucky enough to bet on the Shopify stock when it was first listed, you would be sitting on a 5060% payout right now.

While Shopify has plenty of room to grow further, the growth rate is expected to slow down in the coming years. The business is just too big to maintain triple-digit annual earnings. This is why growth investors should look to much smaller, growing tech stocks. faster.

Here are some of the top stock picks for the coming year.

Best telehealth stock

GOOD Health (TSX: WELL) is an obvious choice for this list. The stock has outperformed Shopify over the past five years. Since 2016, the title is up 6.686%! This phenomenal race was fueled by CEO Hamed Shahbazi’s keen sense of acquisitions.

Here’s how recent acquisitions have contributed to its growth:

  • INSIG Corporation (acquired in 2020): Helped expand telehealth services.
  • CRH Medical (acquired in 2021): Helped the company enter the United States
  • Wisp (acquired in 2021): will enable digital pharmacy services across the United States

This list is just the highlights of their recent deals. The team has absorbed dozens of small and medium-sized startups to reach its current revenue rate of $ 400 million. Meanwhile, the company’s market value is still only $ 1.5 billion. Healthtech is a multibillion-dollar opportunity, and WELL Health’s rivals south of the border are commanding a higher premium.

That’s why this first stock should be on your list.

Best software stock

Topic (TSXV: TOI) is another underrated top pick. Head quarter Constellation Software spun it earlier this year. Since February, it is more than 110%. Shopify, by comparison, is stable over the same period.

There are two reasons why Topicus is likely to outperform in the coming years: valuation and target market. Topicus targets European software companies in niche industries that have strong margins and reliable cash flow. Think of the business as a collector of passive income opportunities across the continent, where there is little competition.

Meanwhile, the title is undervalued. The company is currently worth $ 5.3 billion, but generates between $ 200 and $ 250 million in free cash flow (FCF). In other words, the stock trades at a price / FCF ratio of around 21. In comparison, Shopify trades at a price / FCF ratio.Sales ratio of 47 and a price / earnings ratio of 74. Topicus is incredibly less expensive.

Best FinTech action

Trade at the speed of light (TSX: LSPD) (NYSE: LSPD) is the last choice on this list. Since the start of the year, the title is up 77%. It’s a better run than Shopify. Lightspeed might also have more room to grow than Shopify. This is because its total addressable market is the global payments industry, not just e-commerce. Payment services in physical retail stores, restaurants and service centers all add to a larger market than online retail.

At $ 21 billion, Lightspeed is still a mid-sized tech company by global standards. This is one of the main reasons why this growth value should be on your radar.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .

Fool contributor Vishesh Raisinghani owns shares of Topicus.Com and WELL Health Technologies Corp. The Motley Fool owns and recommends stocks of Constellation Software, Lightspeed POS Inc., Shopify and Topicus.Com Inc. The Motley Fool recommends the following options: 2023 calls at $ 1,140 on Shopify and short calls at $ 1,160 in January 2023 on Shopify.


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