DTOL:CC - 3 Millionaire-Maker Tech Stocks
2024-01-18 11:45:00 ET
Generally, stocks that have the potential to deliver 1,000% returns over time are defined as millionaire-makers. So, investors should identify companies that grow revenue and earnings at a faster pace compared to the broader markets to benefit from outsized gains.
I have identified three millionaire-maker tech stocks you can consider buying today.
Payfare stock
Valued at $300 million by market cap , Payfare ( TSX:PAY ) operates in the fintech segment, providing instant payout and digital banking solutions to gig economy workers in North America.
Payfare increased revenue by 35% year over year to $47.2 million in the third quarter (Q3) of 2023. It ended the quarter with more than 1.21 million active users, an increase of 32% year over year. Moreover, the company’s adjusted net income more than tripled to $7.5 million, while free cash flow rose 29% to $3.6 million in Q3.
Payfare was selected in two requests for proposals to launch finance programs for strategic partners. It signed an agreement with one of these partners, an international big-box retailer, to provide earnings payouts to the retailer’s gig workforce in Canada.
Analysts tracking the TSX tech stock expect the company’s adjusted earnings per share to improve from $0.28 in 2023 to $0.58 in 2024. So, priced at 10.9 times forward earnings, Payfare is an undervalued growth stock that trades at a discount of 50% to consensus price target estimates.
Telus International stock
Valued at $3.3 billion by market cap, Telus International ( TSX:TIXT ) designs, builds, and delivers artificial intelligence and content moderation solutions for global brands. Similar to other growth stocks, Telus International trades 75% from all-time highs due to a challenging macro environment.
However, the company continues to focus on expanding its customer base. In Q3 of 2023, Telus onboarded several new clients, including a U.S.-based online food delivery platform and a property and casualty insurance provider, in addition to a Europe-based luxury fashion retailer.
In the last three quarters, the company has increased sales by 10% year over year to $2 billion. While sales growth has decelerated in recent quarters, Telus International grew its free cash flow by 54% to $159 million in the September quarter.
Priced at 6.3 times forward earnings , Telus International stock trades at a discount of 110% to consensus price target estimates.
D2L stock
The final TSX tech stock on my list is D2L ( TSX:DTOL ), which is valued at $580 million by market cap. It offers cloud-based learning software for higher educational institutions in the U.S., Canada, and other global markets.
In Q3 of fiscal 2024 (ended in October), D2L reported revenue of $46.1 million, an increase of 8% year over year. It ended the quarter with subscription sales of $41.5 million, an increase of 13% compared to the year-ago period.
DTOL explained subscription sales rose on the back of a widening customer base and higher customer spending. Its annual recurring revenue grew by 12% to $180.1 million while operating cash flow also rose 18% to $20 million, indicating a margin of over 40%.
Analysts forecast DTOL to improve adjusted earnings to $0.19 per share in fiscal 2025, compared to a loss of $0.47 per share in fiscal 2023. DTOL stock is priced at a discount of 18%, given consensus price targets.
The post 3 Millionaire-Maker Tech Stocks appeared first on The Motley Fool Canada .
Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Payfare. The Motley Fool recommends Telus International. The Motley Fool has a disclosure policy .
2024