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Canada is often recognized as the best maple syrup producing country along with gorgeous landscape. But over the years, the economy evolved and Canadians saw an opportunity in multiple sectors, ranging from energy to tech space. While investors mostly flock to the US for technology stocks, some of the well-known IT firms are based in Canada.
In this article, we look at some of the hottest and promising Canadian tech stocks beyond Shopify (TSX:SHOP). With a market captilisation of C$215 billion, Shopify the second largest stock and largest tech stock on the TSX. After a bull rally during the peak pandemic months of 2020, the ecommerce stock emerged as the flagbearer of the Canadian tech stocks.
In this list of hot tech stocks, two stocks Constellation (TSX:CSU) and CGI (TSX: GIB.A) rank high in terms of market cap.
Let’s look at all the six tech players.
- Facedrive (TSXV:FD)
Ridesharing company Facedrive is one of the top TSXV stocks. It also provides IT-enabled services and supports food delivery, e-commerce platforms.
The stock was trading C$ 11.67 apiece on Jul 13 (at 2:51 ET). The company holds a market cap of C$ 1.11 billion and has 95.25 million total outstanding shares.
The tech stock is trading nearly 62.13 per cent above its 52-week low of C$ 7.19 and 80.55 per cent below its 52-week high of C$ 60.00, providing ample room to investors make an entry.
However, the stock entered a negative return territory on a one-year basis, down 53 per cent.
The financial statement suggests that the total revenue grew to C$ 4.26 million for quarter ending March 31, 2021, up 25.11 per cent quarter-on-quarter (QOQ).
- Constellation Software Inc (TSX:CSU)
The software stock debuted the Canadian stock market with an Initial Public Offer (IPO) on May 15, 2006. Ranked as one of the top price performers by TSX, the technology stock was trading at C$ 1,911.36 a piece on July 13, 2021 (2:53 EST).
The company’s market cap is C$ 40.51 billion. It churned out a net profit margin of 10.99 per cent. The scrips’ Return on Equity (ROE) was 50.26 per cent as on December 2020. These margins are higher in comparison to its industry average
The stock recorded a six month growth of 17.74 per cent and 18.57 per cent rise in one-year period.
The scrip is trading nearly 39.86 per cent above its 52-week low of C$ 1,366.66 and 1.58 per cent below its 52-week high of C$ 1,941.98.
The financial statements depict a total revenue growth of 7.23 per cent quarter-on-quarter (QOQ) to US$ 1,176 million for the quarter ending March 31, 2020.
- CGI Inc. (TSX: GIB.A)
The next stock to watch out for is CGI Inc., which is listed in both on the NYSE and the TSX. The company has total outstanding shares of 221.48 million and a market cap of C$ 25.17 billion.
The stock is trading nearly 41.52 per cent above its 52-week low of C$ 80.29. It grew by 12.87 per cent over a three-months and returned of 31 per cent in the last one year.
The total revenue posted is C$ 3,078.50 million for quarter ending March 31, 2021, up from C$ 3,019.40 million, a quarter ago.
Out of the total revenue, nearly 29.92 per cent is generated from the US operations, 14.97 per cent from Canada, 12.41 per cent from United Kingdom, and 6.87 per cent from Sweden. This reflects a diversified business model, and the company is not dependent upon one particular region to generate revenue.
The company has higher profitable figures as compared to its industry average. The net profit margin posted is 9.19 per cent versus 4.93 per cent of its industry. The ROE stands at 15.80 per cent, higher than the industry standard of 7.85 per cent.
- OpenText Corporation (TSX: OTEX)
The tech company is among the top price performers on the TSX, and has been outperforming its peers. It made its debut way back in June 1998. The scrips were hovering around C$ 63 on July 13, 2021 (4:36 EST).
The company has a market cap of C$ 17.34 billion and the stock is nearly trading at 32.39 per cent above its 52-week low of C$ 47.95. The stock grew modestly over the past one month, returning 5.01 per cent. The one-year return is 9.37 per cent.
The financial statement indicates that the total revenue came down to US$ 832.9 million for quarter ending March 31, 2021, from US$ 855.5 million in the previous quarter prior.
The profit ratios are higher than its industry average, where the ROE stands at 5.94 per cent.
- Kinaxis Inc (TSX: KXS)
This supply chain management software stock has jumped by 17.72 per cent YTD. The company also delivers a better performance in higher profit margins when compared to its industry peers. It churned out a net profit margin of 6.12 per cent from its operations.
The stock’s ROE stands at 5.36 per cent whereas the industry posted a negative ROE.
United States contributed 62.34 per cent of Kinaxis revenue, Eurpore contributed nearly 22.36 per cent, Asia division added nearly 13.18 per cent and Canadian operations 2.12 per cent.
- Descartes Systems Group Inc (TSX: DSG)
The total revenue generated by the company increased to US$ 98.84 million for quarter ending April 30, 2021, up from US$ 93.41 million in the prior quarter. This indicates a growth of 5.49 per cent quarter-on-quarter (QOQ).
Meanwhile, the stock price was hovering around C$163, nearly 30.49 per cent above its 52-week low of C$ 67.16. The stock jumped 7.33 per cent in the last three months and advanced by 18.28 per cent in one year.
The forward EV/EBITDA stands at 32.27x and the EV/Sales at 13.49x and with price-to-book (P/B) being only 6.46x.
